Nextel Communications Inc. bought $2.7 million worth of Specialized Mobile Radio spectrum from wireless data carrier Motient Corp., according to Motient’s Securities and Exchange Commission filings.
Motient said it did not need the SMR spectrum, and it would use the extra funds for capital requirements and general corporate purposes. The sale is contingent on Federal Communications Commission consent, which Motient said is expected by early next year.
The move is significant for both companies. Nextel has made its living by cobbling together SMR spectrum to build its nationwide voice and data network. Indeed, in 2001 Nextel purchased $250 million in SMR spectrum from struggling paging and messaging carrier Arch Wireless Inc. Nextel also this year has spent close to $200 million on multichannel multipoint distribution system (MMDS) spectrum. Nextel has not said how it plans to use the MMDS spectrum.
For Motient, the deal represents some needed cash for the beleaguered wireless data carrier. Motient recently announced it lost its biggest customer, UPS, and said it is working with the SEC to restate some of its earnings for 2000 and 2001. The company said it has $3.6 million of cash on hand and has so far claimed $4.5 million of its $12.5 million credit facility. Motient said it expects to reach break even in the fourth quarter of next year.
