Sprint snags spectrum, and customers, from US Cellular
$800 a customer, and we'll throw in spectrum too
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Sprint has bought 585,000 customers of US Cellular, but most of the $480m cash wad it will hand over to the wireless operator is for two chunks of radio spectrum that will enable Sprint to roll out LTE in previously unserved markets.
Sprint was always just after the spectrum, the customers just got caught up in the frequencies as US Cellular won't have the capacity to serve those markets once the transfer is completed.
The markets in question include Chicago; South Bend, Indiana; the city of Champaign, Illinois, where Sprint will acquire 20MHz of spectrum around 1900Mhz; and St Louis, where 10MHz will change hands, assuming regulatory approval is forthcoming.
That approval should turn up by the middle of next year, FCC procedures permitting, at which point the half-million US Cellular customers will find themselves becoming Sprint customers, for better or worse.
The US radio spectrum market is complicated by the lack of national licences, so operators are required to hold a patchwork of regional licences and coverage from particular networks which varies widely between regions.
But that model also allows for regional operators, which may hold a local licence and then rely on roaming agreements for out-of-state coverage - though the number of such operators has declined steadily as the economies of scale have driven them into the arms of the competition. ®
COMMENTS
Re: good analysis, but something doesn't add up
US Cellular could reuse the equipment if it was current; as in LTE capable. Sprint has its own equipment vendors and why would they want 99% of their sites to use Brand X and Y and then this 1% use Brand Z.
In markets where Sprint has coverage, they could just add the spectrum to the towers. In markets where they don't, they will need to deploy the equipment of their choice.
good analysis, but something doesn't add up
I read somewhere that the deal was for the spectrum and subscribers, but not for the equipment (or real estate.)
I wonder what US Cellular could possibly do with all of that equipment. Maybe deploy to their remaining markets.
It seems that Sprint will pay them to keep the network running for a while, until Sprint can get the subscribers moved into their spectrum (as they're all CDMA/EVDO mobiles.) But then Sprint would go deploy new CDMA (in the case of capacity needs) or LTE equipment in existing Sprint site locations?
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