U.S. Cellular Corp. entered into a definitive agreement to sell its TDMA wireless operations in South Texas to AT&T Wireless Services Inc. for $95 million in cash.
The operations include 25 megahertz metropolitan statistical area and rural service area licenses currently serving 74,000 customers and covering 1.3 million potential customers and approximately 150 cell sites. The MSA operations include Corpus Christi, Laredo and Victoria, Texas, while the RSA operations include Texas RSAs 18, 19 and 20.
“This transaction is further affirmation of our strategy to exit markets that are not strategic to the company’s long-term success,” said John Rooney, president and chief executive officer of U.S. Cellular. “These properties, while valuable in their own right, neither complement the geographic footprint of the company nor strengthen its competitive position in its larger, more well-established markets.”
Rooney added proceeds from the sale would be used to reduce debt or offset the cost of building out several of the new markets U.S. Cellular recently acquired in another transaction with AT&T Wireless, or to fund spending requirements related to its current CDMA2000 1x network upgrade.
AT&T Wireless said the deal would allow it to expand its footprint in South Texas, as well as better control its roaming costs.
“The move allows us to continue to build market presence, offer contiguous coverage in three major metropolitan areas of Texas and facilitate the quick deployment of our advanced GSM/GPRS technology in the newly acquired markets,” said Robert Stokes, senior vice president of business development at AT&T Wireless. “It also helps us continue to bring down roaming costs, a key corporate objective this year and an area of the business where we’re making significant progress.”
