RealTime IT News

Verizon Goes West

Verizon Wireless will pay $418 million in cash for Qwest's wireless assets, expanding its coverage in 14 states in the West and Midwest.

Pending regulatory approval, the deal is expected to close in late 2004 or early 2005 and includes spectrum licenses in 62 markets, a network switching center, cell sites and related telecommunications equipment.

Qwest's customer base is not part of the pact. Qwest will continue use Sprint's network to offer consumer and business mobile service.

A Qwest spokeswoman was not immediately available for comment. In a statement, Qwest CFO Oren G. Shaffer said, "The sale completes our shift from a network-centric wireless provider to a more customer-focused operation that is designed to deliver exceptional value and service to customers."

The companies expect the handover to go smoothly because both systems operate on the Code Division Multiplex Access standard.

Verizon Wireless is already in 53 of the 62 markets where it's acquiring airwaves. In these cities, like Phoenix, Albuquerque, Seattle and Denver, the acquisition will help boost capacity.

"[We] believe this is a very good deal relative to other recent 1.9GHz spectrum sales, as the transaction includes network, as well," Tom Watts, an analyst with SG Cowen, said in a research note this morning.

Verizon Wireless is a joint venture of Verizon Communications, a Baby Bell, and Vodafone , a mobile voice and data carrier.

In other Verizon news today, the carrier said an internal review showed that the company overstated the number of long-distance lines by 1.5 million. The disclosure was made in a filing with the Securities and Exchange Commission.

The corrected number of long-distance lines in service as of March 31 is 16 million, the company said. Verizon said the error was the result of "an internal system database issue," and has no material effect on its financial results.