Sprint (NYSE: S) wholesale partner nTelos Wireless closed a deal to sell some of its 1900 MHz PCS spectrum to T-Mobile US (NYSE:TMUS) for $56 million. The transaction was announced in December as part of nTelos' plan to exit from its Eastern Markets. NTelos wants to focus on markets in western Virginia and West Virginia where it has a stronger retail presence and benefits from a network deal with Sprint.
The spectrum nTelos sold to T-Mobile covers the operating markets of Hampton Roads/Norfolk and Richmond, Va. Under the agreement, nTelos is leasing back a portion of the spectrum to continue serving customers there until it shuts down its operations in those markets on Nov. 15. As part of the shutdown, nTelos expects to book costs of $55 million.
NTelos has said it expects to transition its subscribers in those areas to another carrier.
As part of its refocusing, nTelos said in February it struck a deal to sell most of its cell towers, up to 103, for $41 million to an affiliate of Grain Management.
"Closing the spectrum sale on schedule is another example of how we are executing on our strategic plan to enhance value for shareholders," nTelos CEO Rodney Dir said in a statement. "The proceeds from the spectrum sale and the towers sale we announced in February 2015 will provide us with additional financial flexibility as we expand 4G LTE coverage in our Western Markets and invest in areas where we are the most competitive."
T-Mobile will likely use the spectrum to deploy LTE services. The carrier has said it will refarm the vast majority of its 1900 MHz spectrum for LTE this year as part of an effort to expand its LTE footprint. T-Mobile aims to cover 280 million POPs with LTE by the middle of the year and 300 million by year-end.
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