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
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.