US Cellular Sells Chicago and Regional Markets to Sprint Nextel
Published on: 9th Jan 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
USA based US Cellular has announced a deal to sell its Chicago St. Louis central Illinois and three other Midwest markets to Sprint Nextel for US$480 million. The sale includes PCS spectrum and approximately 585 000 customers or about 10 percent of U.S. Cellular's total customer base.
The company also announced that it has outsourced its Bolingbrook Customer Care Center operations to an existing vendor partner. After transition and exit costs, the transaction is expected to reduce facilities expenses by more than $3 million annually beginning in 2014.
Following the market divestiture, U.S. Cellular will continue to have more than 1,400 retail outlets in the Chicago area and said that it may keep open certain retail locations in the Transaction Markets and will provide certain transition services to Sprint. Over time, both company and agent-owned stores will be closed.
U.S. Cellular will retain its direct and indirect ownership interests in approximately 560 towers and other spectrum in the Transaction Markets.
For the nine months ended Sept. 30, 2012, the Transaction Markets generated service revenues of approximately US$340 million (11 percent of reported consolidated service revenues) and, after all direct and indirect costs, incurred an operating loss.
The transaction is subject to Federal Communications Commission approval, compliance with the Hart-Scott-Rodino Act and other conditions. Subject to the satisfaction or (if permitted) waiver of all conditions, the transaction is expected to close by mid-2013.