T-Mobile Ends Cingular Venture

T-Mobile USA to end network venture with Cingular and acquire California/Nevada network and spectrum

May 25, 2004

2 Min Read

BELLEVUE, Wash. -- T-Mobile USA, Inc. ("T-Mobile USA"), the U.S. operating subsidiary of T-Mobile International AG & Co. KG ("T-Mobile International"), the mobile communications subsidiary of Deutsche Telekom AG (NYSE:DT) ("Deutsche Telekom"), today announced it has entered into agreements with Cingular Wireless LLC ("Cingular") to terminate their wireless network sharing joint venture and for T-Mobile USA to acquire 100% ownership of the shared networks in California and Nevada for $2.5 billion. The purchase price of $2.5 billion for the GSM network in California/Nevada will be offset by $200 million related to the unwinding of the joint venture, resulting in a net cash payment of approximately $2.3 billion to Cingular. In addition, T-Mobile USA will:

  • provide network services to Cingular under a wholesale arrangement until Cingular's customers in these markets transition to the networks it will acquire through its pending merger with AT&T Wireless Services, Inc. ("AT&T Wireless");

  • replace its existing roaming agreement with Cingular with a new nationwide agreement with improved terms;

  • transfer 10 MHz of New York spectrum in exchange for certain California spectrum owned by Cingular as specified in the termination provisions of the joint venture agreement;

  • acquire an additional 10 MHz of spectrum from Cingular in certain key California markets for $180 million; and

  • receive an option to acquire an additional 10 MHz of spectrum in other key California markets from Cingular within two years.

While the joint venture has owned and successfully operated the networks that service both companies' customers in these markets since its formation in 2001, this new agreement with Cingular is expected to position T-Mobile USA for continued operational success and strong growth in the future.

"Consumers will be the real winners from this agreement," stated Robert Dotson, CEO and President of T-Mobile USA. "With this agreement, our customers can be confident they will continue to enjoy the reliable, high quality service currently provided by our world class network in California and Nevada without interruption. Also, the nationwide reciprocal roaming agreement ensures that our customers will have access to the nationwide networks of T-Mobile USA and Cingular, providing them with the greatest possible coverage."

T-Mobile USA

Cingular Wireless

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