US Cellular Corporation has announced that has reached a definitive agreement to sell PCS spectrum and subscribers covering Chicago, St. Louis, central Illinois and three other Midwest markets to subsidiaries of the Sprint Nextel Corporation for USD480 million. The sale includes around 585,000 customers, or around 10% of the cellco’s total customer base. The move is expected to help the carrier to ‘increase focus on markets where it has strong positions and streamline operations to increase overall efficiency and effectiveness’. For the nine months ended 30 September 2012 the so-called ‘Transaction Markets’ generated service revenues of approximately USD340 million (or 11% of reported consolidated service revenues), but incurred an operating loss.
Mary N Dillon, the company’s president and CEO, commented: ‘In the dynamic wireless marketplace, we have a clear strategy to accelerate profitable growth and increase return on investment over the long term, and we are taking decisive steps to achieve it. Exiting these markets enables us to play to our strengths in markets where we have higher penetration and where we can effectively sharpen our proven strategy to differentiate the US Cellular customer experience from other wireless carriers. Going forward, we will continue to serve more than 5.2 million customers with the unparalleled experience they expect from US Cellular’. The company will retain its direct and indirect ownership interests in approximately 560 towers and other spectrum in the aforementioned markets. The transaction is subject to Federal Communications Commission (FCC) authorisation and other standard regulatory conditions. Subject to approval, the transaction is expected to close by mid-2013.