Sprint Corp. wireless affiliate UbiquiTel Inc. said it has entered into a forebearance agreement with Sprint that will halt UbiquiTel’s attempts to seek injunctive or equitable relief from Sprint in connection with Sprint’s pending acquisition of Nextel Communications Inc. UbiquiTel filed a suit against Sprint last month claiming the pending acquisition would violate terms of UbiquiTel’s affiliate agreement.
Sprint has agreed to not use Nextel’s network or spectrum in UbiquiTel’s service areas to offer CDMA services, including the G block 1.9 GHz spectrum Nextel is receiving from the Federal Communications Commission as part of its spectrum realignment plan. Sprint said also it will not offer dual-mode CDMA/iDEN handsets in UbiquiTel’s service areas unless the CDMA portion of the handset is programmed to use UbiquiTel’s network on a first priority-basis prior rather than using the iDEN network in its service areas.
The agreement also includes several provisions designed to protect UbiquiTel’s CDMA customer base from competing iDEN services that will be offered by Nextel in UbiquiTel’s service area. The terms include promotional material, billing and subscriber records, customer care and migration services, and network performance reports.
In addition, the agreement calls for Nextel affiliate Nextel Partners Inc. to adhere to terms of the deal should Sprint gain a controlling interest in Nextel Partners. Nextel currently controls 32 percent of its affiliate, which has recommended that its shareholders exercise their put option following Sprint’s acquisition of Nextel, forcing Nextel to acquire the remaining interest in Nextel Partners that it does not already own.
Sprint reported late last week an agreement with wireless affiliates iPCS Inc., Horizon Personal Communications Inc. and Bright Personal Communications Services L.L.C. under which the affiliates would not seek injunctive or equitable relief against Sprint or Nextel in exchange for Sprint not revealing operational information about the affiliates to Nextel.
The iPCS agreement calls for Sprint to modify its branding campaign in the affiliates’ markets and gives the companies until Jan. 1 to work out any potential modifications to the affiliate arrangements. More importantly for Sprint, the agreement removes a temporary restraining order that prevented Sprint from sharing certain information with Nextel ahead of their deal that could have delayed Sprint’s acquisition of Nextel, which is expected to close during the third quarter.
Sprint announced last month that it was acquiring disgruntled affiliate US Unwired Inc. for $1.3 billion. Both companies were in the midst of court proceedings brought by US Unwired against Sprint claiming the pending acquisition of Nextel would violate portions of its affiliate agreement.