Sprint today announced that it has made an arrangement with U.S. Cellular to acquire PCS spectrum and also wireless network customers for $480 million in cash, and Sprint’s taking over of “certain liabilities” on behalf of U.S. Cellular. The arrangement will help Sprint bolster its own network as it rolls out LTE nationally, the company said in a press release, helping to beef up network capacity. U.S. Cellular customers in Illinois, Indiana, Michigan, Missouri and Ohio, 585,000 in total, will also become Sprint customers as part of the deal.
Sprint gets 20 MHz of PCS spectrum in the 1900 MHz band in a number of locales, and 10 MHz of PCS spectrum in the St. Louis market in exchange for its lump sum in addition to the subscribers. U.S. Cellular will continue to operate in its other existing markets once the deal goes through, which should happen sometime in the middle of next year, so long as government regulatory bodies including the Department of Justice and the FCC sign off on the deal.
For U.S. Cellular, the subscribers it’s giving up represent around 10 percent of its overall user base. For Sprint, the addition will help add to the 410,000 net subscriber additions they posted during their Q3 financial results. The news also comes on the heels of SoftBank’s announcement that it will be acquiring a 70 percent stake in Sprint thanks to a $20.1 billion investment.
U.S. Cellular announced an overall revenue and EPS miss for its Q3 results, too, so it makes sense that it would be looking around for ways to help it strategically mitigate revenues that have declined year over year.