Cellular One shutting down service in Montana, Wyoming

Cellular One is shutting down service in Montana, and according to a letter it sent to customers in May, and will also shut down service in Wyoming as well. According to Gary Duncan, a spokesman for the Montana Public Service Commission, Cellular One will cease operations in the two states on Aug. 31.

Cellular One is a brand name that several smaller carriers operate under. MTPCS, which operates the Cellular One brand in Montana, parts of Wyoming and Texas, is likely the one that is shutting off the service. Cellular One spokeswoman Margaret McKoin confirmed the shutdowns. She said that Cellular One does not have plans to shut down services in any other states.

According to a statement from the Montana PSC, Cellular One customers are being advised to find an alternative carrier prior to Aug. 31 to avoid an interruption in service. The letter sent to customers indicated Cellular One will waive all Early Termination Fees and is working with AT&T Mobility (NYSE: T) to make it easy for customers to switch to AT&T. Cellular One customers affected by the shutdown will get a $100 bill credit when they switch to AT&T and choose a new plan, and activation fees will be waived. Further, Cellular One retail locations will switch to being AT&T retail locations, the letter said. The Montana PSC said Cellular One customers should be aware that their existing wireless phones will work on the AT&T network; however, those phones may not work on other wireless networks.

Cellular One was designated an Eligible Telecommunications Carrier (ETC) by the Montana PSC in 2008, allowing the company to receive approximately $20 million in federal subsidies to build its network in underserved rural areas.

However, Duncan noted to FierceWireless that since then the FCC has reformed its Universal Service Fund and phased out high-cost support for wireless ETCs over five years. He said that was one of the factors in the company's decision to discontinue service. The PSC said in its statement that Cellular One said it "no longer has a viable business plan to serve Montanans."

Cellular One said in its letter to customers that its business model "simply did not support the significant capital investment required to upgrade its Montana network to the 4G technology needed to remain competitive with the large national service providers, particularly in light of the elimination of support from the Universal Service Fund."

Sprint spokeswoman Crystal Davis confirmed to FierceWireless that Sprint has purchased Cellular One's tower leasing rights in Montana, but she said Sprint has not purchased any of Cellular One's customers, spectrum or retail locations in the state. She declined to say how much the transaction is worth.

"Cellular One has sold its network and network-related assets in Montana and Wyoming to Sprint," McKoin said. "We can not comment on the value."

Cellular One is just the latest small wireless operator to shut down service. Other wireless carriers that have exited the business include Cincinnati Bell Wireless, Revol Wireless, Mobi PCS, Plateau Wireless, AirFire Mobile and others. Article

Article updated Aug. 13 at 4:15 p.m. ET with comments from Cellular One.

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