Dec, 03 2012

US carriers Sprint and US Cellular have announced a spectrum sale between the two that will see the former selling key Midwest spectrum to the latter for $480 million. For that price, Sprint will take control over the PCS spectrum in areas like Illinois, Ohio, Michigan and Indiana. The Midwest is US Cellular’s biggest breeding ground so it’s a very significant deal to behold.

Sprint is also said to be receiving US Cellular’s customer base in those areas, though how many new contracts they’ll be snapping up isn’t being disclosed at this time. The deal is expected to close at some point in 2013, and there doesn’t appear to be any worry about resistance.

This is good news for Sprint which is banking on a “network vision” movement that will deliver a vast LTE network to its consumers by 2013’s end, and will also have considerable impact on the performance of its current 3G and voice networks.  Considering how bad the network has gotten for many users in this region I’d say this purchase couldn’t have come at a better time.

Sprint will apparently pay cash for the deal, and will assume any liabilities that may come with it. The company no doubt has the assets to do so considering it was just bought out by SoftBank Corp. last month for $20.1 million, and received $3 billion out of that last month.

Cash flow was never a huge concern for Sprint even before this network vision project took off so there should be no doubt in anyone’s mind that the carrier can complete it now (and within the time frame that was originally promised). More details have yet to roll in, but we won’t need them until it’s confirmed whether or not the deal will close at some point next year.

[via Business Week]

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