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Sprint to Buy Midwest U.S. Cellular Markets

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
11/7/2012
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Sprint Corp. (NYSE: S) wants to buy Chicago and five other Midwestern markets from smaller rival U.S. Cellular Corp. (NYSE: USM) for US$480 million, adding to its customer base and spectrum holdings.

The carriers said Tuesday that Sprint is planning to buy markets in Chicago, St. Louis, central Illinois and three other Midwest markets. The transaction will net Sprint approximately 585,000 customers -- or about 10 percent of U.S. Cellular's total subscriber base -- and 1900MHz PCS spectrum.

Additional PCS spectrum could be particularly important for Sprint; the operator is currently using these radio frequencies to deploy its nascent 4G Long Term Evolution (LTE) network. The operator currently has 32 of the new 4G markets deployed.

For its part, U.S. Cellular says that the deal will help the carrier achieve its aim of deploying 4G to 58 percent of its remaining 5.2 million customer base by the end of the year. "The transaction will help us finance LTE," said the operator's CEO, Mary Dillon, on a call Wednesday morning.

The company says that it has already sold 265,000 4G LTE devices, like the Samsung Corp. Galaxy S III smartphone, even before the 4G networks are up.

U.S. Cellular said in October that it will launch LTE in 30 new markets on 700MHz spectrum in partnership with King Wireless this week.

The boards of both carriers have approved the deal. It is subject to regulatory approval and should close by mid-2013.

For more



— Dan Jones, Site Editor, Light Reading Mobile

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joset01
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joset01,
User Rank: Light Beer
12/5/2012 | 5:18:00 PM
re: Sprint to Buy Midwest U.S. Cellular Markets


Yeah, they said tey were getting something like 3 to 4% penetration in Chicago compared to a 13% average. Suggests that smaller towns and cities might be a more fruitful target for them.

joanengebretson
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joanengebretson,
User Rank: Light Beer
12/5/2012 | 5:18:00 PM
re: Sprint to Buy Midwest U.S. Cellular Markets


I found it interesting that U.S. Cellular said the markets it was selling were unprofitable. Makes you realize how valuable the spectrum alone is to someone like Sprint -- and tends to support the idea that an individual market can only support a relatively small number of wireless service providers.

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