25 May 2004
Cingular Cancels Joint Venture With T-Mobile
Posted by Zane under: News .
Cingular Wireless will end its network infrastructure joint venture with T-Mobile USA in New York, California and Nevada, selling the California and Nevada network and certain California and Nevada spectrum to T-Mobile USA for $2.5 billion.Atlanta-based Cingular will also receive 10MHz of spectrum from T-Mobile in the New York BTA as part of the dissolution terms originally agreed in 2001. T-Mobile USA, in addition to acquiring the network infrastructure in California and Nevada, will obtain 10MHz of additional spectrum from Cingular in San Francisco, Sacramento and Las Vegas, as well an option to buy an additional 10 MHz in the Los Angeles and San Diego BTAs. The transaction is contingent on federal approvals of Cingular’s $4.1 billion acquisition of AT&T Wireless. The transaction is also subject to approvals from the FCC and Department of Justice. It is expected to close early in the first quarter of 2005.Both Cingular and T-Mobile customers are unaffected by the deal, with both companies retaining their own customers. Cingular’s customers will also continue to use the California, Nevada and New York networks for up to four years. As a result, the transition should be transparent to Cingular’s customers.
The infrastructure joint venture, which was announced in October 2001, provided a cost-effective means for Cingular to enter the New York City market and T-Mobile to enter the California and Nevada markets. The joint venture acted as a “factory,” producing and making wireless minutes available to both carriers, while providing consumers a wider choice in wireless service.
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