RealTime IT News

Cingular, T-Mobile to Disband Joint Venture

As its multi-billion-dollar takeover of AT&T Wireless works through the approval process, Cingular Wireless is moving to end a network infrastructure joint venture with T-Mobile USA.

Cingular will sell its mobile networks California and Nevada, as well as 10 MHz of spectrum space in greater Las Vegas, Sacramento and San Francisco, to T-Mobile for approximately $2.5 billion.

In addition, T-Mobile will receive and option to buy an additional 10 MHz in Los Angeles and San Diego coverage areas.

For its part, Cingular will gain 10 MHz of spectrum from T-Mobile in the New York area as part of the dissolution terms in the companies' joint venture contract signed in 2001.

A spokeswoman for Atlanta-based Cingular was not immediately available for comment.

In a statement, Stan Sigman, Cingular's president and CEO, said, "Over the last two years, our joint venture with T-Mobile has been good for Cingular, its customers and wireless consumers in general. Today's announcement means Cingular's customers will continue to have top-notch wireless service and be able to look forward to advanced data applications in the future."

The transaction is contingent on federal regulators approving of Cingular's acquisition of AT&T Wireless. Officials will also review the terms and market impact of today's Cingular/T-Mobile plan.

Provided they receive the necessary approvals, the companies hope to close the purchase early next year.

With its winning bid for AT&T Wireless, Cingular, a joint venture between SBC Communications and BellSouth , shook up a U.S. mobile marketplace that many industry watchers said was sorely in need of consolidation.

Today's news represents further fallout. For T-Mobile USA, a Bellevue, Wash., subsidiary of German giant Deutsche Telecom , it's a cheaper (compared to an acquisition) way to further expand its reach in the United States. At one time, T-Mobile was thought to be among the possible bidders for AT&T Wireless.

As wireless applications become more advanced and reliable, the value of the airwave increases, as evidenced by the recent wrangling between Verizon Wireless and Nextel.

We have made updates to our Privacy Policy to reflect the implementation of the General Data Protection Regulation.