Ntelos CEO talks up value of spectrum in light of AT&T/Leap deal

U.S. Cellular, Ntelos possible acquisition targets amid continuing consolidation
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In the wake of AT&T Mobility's (NYSE:T) proposed acquisition of Leap Wireless (NASDAQ:LEAP), nTelos CEO James Hyde said his company's spectrum holdings are an increasingly valuable asset.

Financial analysts believe AT&T is likely overpaying for Leap's spectrum, but Hyde said AT&T's offer boosts nTelos' own value. "These transactions are being done at increased valuations," he told Bloomberg. "That's always a good thing when you are a public company like nTelos."

Ntelos holds PCS, AWS, WCS and 2.5 GHz BRS spectrum, and has around 450,000 retail customers. It also has a wholesale deal to offer Sprint (NYSE:S) service in West Virginia and western Virginia. Dish Network (NASDAQ: DISH) announced it recently completed a test of an LTE fixed wireless Internet technology that delivered speeds of 20 to 50 Mbps using nTelos' 2.5 GHz BRS spectrum.

"Just the mere fact that we provide wholesale services--clearly, we've got a strategic set of assets," Hyde said.

U.S. Cellular (NYSE:USM), which has sold spectrum to Sprint and T-Mobile US (NYSE:TMUS) in recent months, is also viewed as a takeover target. The company has struggled to add postpaid subscribers despite increased smartphone sales. Like nTelos, larger carriers could view U.S. Cellular as another source of spectrum to add to their reserves.

"The Big Four carriers are not overly optimistic around the timing of new spectrum coming to market, and we believe there could be more consolidation in the secondary market which may involve regional players," Wells Fargo analyst Jennifer Fritzsche wrote in a research note, according to Dow Jones Newswires.

Hyde declined to comment on whether nTelos is in talks with any other carrier about a deal. A U.S. Cellular spokeswoman declined to comment, according to Bloomberg.

Regional carrier C Spire Wireless said it is worried about further industry consolidation. "Our company has successfully operated in the wireless business since 1988 as a privately-held wireless provider," C Spire spokesman Dave Miller told FierceWireless. "We welcomed many new companies to the industry in the 1990's and we're disturbed by the current trend of smaller operators being acquired. Our industry needs more competition, not more consolidation, and C Spire intends to continue aggressively competing as an independent company."

For more:
- see this Bloomberg article
- see this Dow Jones Newswires article (sub. req.)
- see this separate Bloomberg article

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Fate of Aio uncertain in wake of AT&T's acquisition of Leap
AT&T snaps up Leap Wireless for $1.2B
Previewing its Clearwire plans, Dish tests 50 Mbps fixed LTE service with nTelos spectrum
T-Mobile scoops up some of U.S. Cellular's AWS spectrum for $308M
U.S. Cellular to sell Midwestern markets, spectrum to Sprint for $480M

Article updated July 16 at 1:30 p.m. ET with a statement from C Spire.