U.S. Cellular (NYSE:USM) will pay $91.5 million for spectrum and cell towers from Airadigm Communications, which will lead to the shutdown of Airadigm's AirFire Mobile brand and wireless network. According to a filing with the Securities and Exchange Commission, U.S. Cellular is buying the spectrum and tower assets in certain markets in Wisconsin, Iowa, Minnesota and Michigan. The deal is expected to close during the third quarter. AirFire's home network is limited to parts of Wisconsin.
Interestingly, U.S. Cellular parent Telephone and Data Systems is the sole owner of Airadigm. The transaction also includes a program in which Airadigm will earn a "migration fee" from U.S. Cellular for each Airadigm customer who becomes a U.S. Cellular customer.
As a result of the deal, Airadigm "will shut down operation of its consumer wireless business and most of the associated network," the filing states.
The Airadigm assets U.S. Cellular is not buying "will be sold or otherwise disposed of, its tower leases, interconnection and other agreements will be terminated and most of its employees will be terminated." The filing states that the shutdown of Airadigm's AirFire business "is expected to be substantially complete in the third quarter of 2014."
"U.S. Cellular is working with Airfire to make it easy for AirFire customers to sign up for service before the AirFire network is shut down," U.S. Cellular spokeswoman Katie Frey told FierceWireless. "The AirFire network will remain active and they will continue to provide service and Customer Support through September 2, 2014. After that date, AirFire Mobile will be turning off all consumer wireless services. Airadigm will continue to focus on its wholesale business communications operations."
Airadigm's AirFire Mobile is the latest regional wireless carrier to shut down its network and operations. Revol Wireless in Ohio and Indiana last year sold off its spectrum licenses to Sprint and shuttered its CDMA network. And earlier this year Cincinnati Bell, the nation's ninth-largest wireless carrier, announced that it will shut down its wireless network and sell its spectrum to Verizon Wireless.
Article updated May 30 with a statement from U.S. Cellular.