Wireless carrier Sprint Nextel (NYSE:S) has announced that it will acquire PCS spectrum and customers from U.S. Cellular (NYSE:USM) for $480 million and the assumption of certain liabilities. The markets being included in the deal are in Illinois, Indiana, Michigan, Missouri, and Ohio, including the Chicago and St. Louis markets.
Sprint CEO Dan Hesse said the transaction will bolster Sprint's competitive position and add to its network capacity and beef up service in the Midwest, and help with its 4G LTE rollout. Sprint is acquiring 20 MHz of spectrum within the 1900 MHz band in most of these markets, and 10 MHz of spectrum in the St. Louis market. Approximately 585,000 U.S. Cellular customers are involved in the deal, about 10% of U.S. Cellular's total customer base.
"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 U.S. Cellular customer experience from other wireless carriers," U.S. Cellular CEO Mary N. Dillon said in a statement.
The transaction is subject to regulatory approvals, and is expected to close in mid-2013. U.S. Cellular customers won't be affected until then.
Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.