Sprint PCS affiliate US Unwired Inc. said it has entered into agreements to sell certain “non-core operating assets,” including its cellular operations that served approximately 57,000 subscribers at the end of the second quarter and eight of its 13 10-megahertz PCS licenses located in Louisiana, Texas and Mississippi to Cingular Wireless L.L.C. for approximately $30 million.
The deal calls for Cingular to take over US Unwired’s cellular network in Lake Charles, La., as well as acquire spectrum licenses in Alexandria and Shreveport, La.; Longview and Paris, Texas; and Texarkana, Texas/Arkansas. Cingular added that it currently provides service in all of the markets except Texarkana.
US Unwired, which is reportedly attempting to renegotiate its bank covenants in an attempt to preserve its borrowing availability, said it will continue to operate under its licensing agreement with Sprint PCS in its Louisiana, Texas and Mississippi markets.
“These transactions strengthen our balance sheet and allow us to focus on our core PCS division,” said Robert Piper, president and chief executive officer of US Unwired. “We started wireless in 1987 with our cellular operations, so it’s clearly important for us from a historical perspective, however, it now represents less than 3 percent of our revenues and can now best serve the company as cash.”
Cingular, which has announced a number of spectrum deals during the past several months, including a $1.4 billion bid for 34 licenses from NextWave Telecom Inc., said the US Unwired deal will strengthen its coverage area.
“This is another opportunity for Cingular to expand our coverage area and add spectrum at a fair price,” said Mark Feidler, chief operating officer at Cingular. “We’re also bringing Cingular service to Texarkana, and we’re looking forward to serving the people there.”
The deal is expected to close by the end of this year and is subject to approval from the Federal Communications Commission and US Unwired’s senior credit lenders.
