Rural carrier NTelos said it will split its wireless and wireline businesses, and spin off the wireline segment into a separate, publicly traded company called "The New Wireline Company." NTelos said the action will give the two units the best opportunity to grow.
The company said the deal will be structured as a tax-free distribution of The New Wireline Company shares to stockholders of NTelos during the second half of 2011. Both companies are expected to be listed on the Nasdaq stock exchange.
"The motivation for separation really relates to how are these businesses going to be best positioned to grow in the future?" NTelos CEO Jim Hyde said during a conference call, according to the Charleston Gazette. "This is a separate and grow initiative."
After the separation the wireless business will be run by Conrad Hunter, currently NTelos' executive vice president and president of wireless. The wireless business will include its retail operations, primarily in Virginia and West Virginia, and a wholesale business that generates revenues under an exclusive contract with Sprint Nextel (NYSE:S). NTelos is the exclusive service provider for Sprint's CDMA subscribers in its western Virginia and West Virginia service area.
At the end of the third quarter, NTelos counted around 434,000 wireless retail customers and reported revenue of $406.4 million.
- see this release
- see this Charleston Gazette article
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