Sprint PCS affiliate iPCS Inc. said it has reached an agreement with Sprint PCS amending its affiliation agreements, agreed to settlement terms to resolve its litigation against Sprint PCS and filed a reorganization plan with the bankruptcy court March 31.
The affiliation agreement amendments, which are subject to iPCS’ emergence from bankruptcy, establish a fixed reciprocal roaming rate for voice and second-generation data at 5.8 cents per minute as well as a fixed rate for third-generation data through 2006. The roaming rate is the same used for all of 2003 and according to iPCS is a 40-percent increase over the proposed 2004 roaming rate. Roaming rates and fees for Sprint PCS-provided back-end services will change beginning in 2007 based on an agreed upon methodology.
In conjunction with the amendments, iPCS and its secured and unsecured creditors agreed to settlement terms regarding its pending litigation against Sprint PCS, including resolution of all previously disputed charges between the two companies. The settlement calls for iPCS to pay a portion of the amounts disputed as well as to stay all of the litigation against Sprint PCS pending confirmation of its reorganization plan.
“We are very pleased to have reached this milestone on our relationship with Sprint,” said Tim Yager, chief restructuring officer at iPCS. “We are excited about the reduced rate structure for Sprint services, as well as the new fixed roaming rates, each of which offers significant benefits over the current structure while also simplifying our relationship with Sprint and providing us with greater long-term predictability.”
iPCS, which serves more than 220,000 customers in four Midwestern states and was acquired by fellow affiliate AirGate PCS Inc. in 2001, originally filed for Chapter 11 bankruptcy protection early last year, claiming Sprint PCS breached its affiliate agreement and “significantly contributed” to its financial troubles. Sprint PCS countered that iPCS’ financial troubles were due to its debt load and the competitive nature of the industry.
