The USA based Cingular Wireless and NextWave Telecom have belatedly announced an agreement for Cingular to purchase licenses from NextWave to provide wireless services in 34 markets for US$1.4 billion. Most of the news was leaked by accident when a preliminary press release was sent out early by a PR agency.
The licenses, which cover approximately 83 million potential customers, are for spectrum primarily in markets where Cingular currently has voice and data operations.
The transaction is also subject to review and approval by the Bankruptcy Court overseeing NextWave's reorganization and by the FCC.
"This agreement represents a major step forward in our reorganization process," said Allen Salmasi, NextWave's Chairman and CEO. "The proceeds of the deal will enable us to satisfy a significant portion of our obligations to the government and to other creditors. The transaction strengthens NextWave's capitalization and positions the company to complete its reorganization and initiate the build out of its next generation broadband wireless network in a significant number of markets, including New York, Los Angeles, Washington, D.C., and in other major markets around the country."
Under terms of the deal, Cingular would pay US$1.4 billion in cash, and obtain FCC authorization to operate on 10 MHz of broadband PCS (1900 MHz) spectrum in the following markets:
Los Angeles, CA; Chicago, IL; San Francisco, CA; Dallas, TX; Houston, TX; Washington, DC; Atlanta, GA; Boston, MA; San Diego, CA; Baltimore, MD; Portland, OR; Sacramento, CA; Las Vegas, NV; Salt Lake City, UT; Allentown, PA; Harrisburg, PA; Springfield, MO; Sarasota, FL; Manchester, NH; Portland, ME; Lakeland, FL; York, PA; Lancaster, PA; Poughkeepsie, NY; Reading, PA; Hagerstown, MD; Temple, TX; Gainesville, FL; Tyler, TX; Joplin, MO; Salisbury, MD; and Kankakee, IL.
Cingular would also obtain FCC authorization to operate on 20 MHz in the 1900 MHz band in Tampa, FL and El Paso, TX. Cingular currently provides service in all of these markets except for Portland, OR; Salt Lake City, UT; El Paso, TX; Manchester, NH; Hagerstown, MD; Salisbury, MD; and Kankakee, IL. NextWave also holds FCC authorizations to operate on 1900 MHz spectrum in 61 other markets.
The two companies will present the bidding procedures relating to the offer and, ultimately, the results of an auction to be held by NextWave to the U.S. Bankruptcy Court for the Southern District of New York for its approval. NextWave voluntarily initiated bankruptcy reorganization procedures in June 1998.
Once bankruptcy court approval is obtained, the transaction will be submitted to the FCC for approval of the license transfers. NextWave and the FCC have negotiated a separate term sheet that provides for payment of NextWave's financial obligation to the U.S. Treasury associated with the license rights to be assigned to Cingular."
Posted to the site on 6th August 2003
Posted to: www.cellular-news.com/story/9456.php