Despite a press release from NextWave Telecom Inc.’s public relations company that a deal had been reached, Cingular Wireless L.L.C. said it is still in negotiations to purchase wireless licenses covering 83 million potential customers in 34 markets from the bankrupt license holder for $1.4 billion.
The hastily retracted release noted the deal involved 10-megahertz licenses in a number of top 40 markets, including Los Angeles, Chicago, San Francisco, Dallas, Houston, Washington, D.C., Atlanta, Boston, San Diego, Baltimore and Las Vegas, as well as 20-megahertz licenses in Tampa, Fla., and El Paso, Texas.
Cingular was also to pick up licenses in a number of markets where it does not offer service, including Salt Lake City; Portland, Ore.; Manchester, N.H.; Hagerstown, Md.; Salisbury, Md.; and Kankakee, Ill.
“While this deal allows Cingular to enhance our spectrum position in many of our larger existing markets, it is primary for the future growth of the company,” said Mark Feidler, chief operating officer at Cingular, in the since retracted statement. “This spectrum will allow us more room to provide additional services and products, to expand coverage in some of our key markets and to better accommodate overall growth.”
The release said the deal would be presented to the U.S. Bankruptcy Court for the Southern District of New York, which would have to approve the deal, and then to the Federal Communications Commission for approval of the license transfer.
The release also said NextWave has negotiated with the FCC a separate term sheet providing for payment of NextWave’s more than $4 billion financial obligation for the licenses to the U.S. Treasury associated with the Cingular deal.
“This agreement represents a major step forward in our reorganization process,” said Allen Salmasi, chairman and chief executive officer of NextWave, in the press release “The proceeds of the deal will enable us to satisfy a significant portion of our obligations to the government and to other creditors.”
Salmasi added that the deal would also strengthen its capital position and allow the company to move forward with its plans to build out a high-speed wireless data network in a number of markets, including New York, Los Angeles and Washington, D.C.
