RealTime IT News

Cingular Divests More Spectrum

To clear the way for its merger with AT&T Wireless, Cingular Wireless has sold spectrum licenses in Dallas and Detroit to MetroPCS for $230 million, the companies announced today.

The transaction mirrors a $170 million deal Cingular struck with Alltel on Friday for airwave space in Connecticut, Georgia, Kansas, Kentucky, Mississippi, Oklahoma and Texas.

Both divestitures are part of the Atlanta carrier's agreement with the federal regulators who were concerned with the impact of Cingular's $41 billion takeover of AT&T Wireless on customers and rivals.

The Department of Justice (DoJ) approved the mega-merger, provided Cingular sold spectrum and customer contracts in 11 states.

For the regional players, the sales help them expand their regional footprints.

"[The spectrum purchase] will allow us to develop two more of the largest markets in the United States with our unique service," Roger Linquist, CEO of MetroPCS, said in a statement.

MetroPCS is based in Dallas. The spectrum acquisition, which is expected to close during the first quarter, puts its service in five of the top 12 U.S. markets, including Atlanta, Miami and San Francisco, the company said.

Cingular is also making other moves as the integration of AT&T Wireless approaches. CEO Stan Sigman recently revealed that the company will cut about 7,000 jobs, a little more than 10 percent of the workforce beginning in January.

The positions will likely be concentrated in administrative departments, rather than the customer service organizations. It's unclear what percentage of the cuts will hit former AT&T Wireless employees.