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McLeodUSA Sells PCS Licenses for $100 Million

McLeodUSA Inc. Thursday revealed that it has sold two of its PCS licenses and has secured agreements to sell its remaining licenses to four buyers for more than $100 million. The company plans to reinvest the proceeds in its core operations.

The company had been working to roll out a wireless network and a fiber network simultaneously. The sales appear to indicate a shift to a narrower focus on the fiber rollout.

McLeodUSA has both Block D and E licenses of 10-20 MHz -- covering markets in Iowa, Illinois, Minnesota, Nebraska and South Dakota -- which it picked up in January 1997 for about $30 million.

The buyers include U.S. Cellular Corp., TeleCorp. PCS, HickoryTech Corp. and Midwest Wireless.

"When we spoke with our financial analysts and key investors on Feb. 21, we indicated that there are both opportunities and challenges in our forecast for 2001," said Steve Gray, president and co-chief executive officer of McLeodUSA. "An opportunity has been realized with this sale of our wireless licenses. We will continue to evaluate other non-core assets to determine the value, both operationally and economically, to the core business of McLeodUSA."

The company completed the sale of two licenses in April. Terms of the transactions were not disclosed. The company anticipates closing the rest of the sales over the remainder of 2001, but they are still subject to FCC and Hart-Scott-Rodino approval.

Denver-based media and telecommunications mergers and acquisitions specialist Daniels & Associates represented McLeodUSA in the sales.