RealTime IT News

Sprint Nextel Pays $4B For Affiliate

Sprint Nextel will pay $4 billion for longtime affiliate Alamosa Holding Co., bringing 1.5 million subscribers in 19 states directly under its control and short-circuiting a lawsuit.

The cash deal requires approval from Alamosa shareholders and regulators, but is expected to close during the first quarter.

"As the largest PCS affiliate, we appreciate their efforts over the years to grow Sprint's business and we look forward to continuing a strong relationship with their customers," Gary Forsee, Sprint Nextel CEO, said in a statement.

Buying Alamosa also puts the kibosh on a lawsuit. In August, Alamosa sued Sprint regarding exclusivity covenants Sprint had with Alamosa's subsidiary AirGate.

As part of the buyout, Sprint Nextel and AirGate will seek an immediate stay of litigation pending in the Delaware Court of Chancery. The case will end if the deal is consummated.

The purchase of Lubbock, Texas-based Alamosa is the latest in a string of affiliate acquisitions for Sprint Nextel. This year, it has bought three others -- US Unwired, IWO Holdings and Gulf Coast Wireless -- which had more than 800,000 combined subscribers.

Sprint Nextel, which was formed in August with the merger of Sprint and Nextel Communications, will have six remaining affiliates.

"We've been actively talking with [the remaining affiliates] for some time to achieve a mutually beneficial outcome," Nick Sweers, a Sprint Nextel spokesman, told internetnews.com.