NextWave Telecom and Cingular Wireless today announced an agreement for Cingular to purchase licenses from NextWave to provide wireless services in 34 US markets for $1.4 billion.
The licenses, which cover approximately 83 million potential customers, are for spectrum primarily in markets where Cingular currently has voice and data operations.
The transaction is subject to review and approval by the Bankruptcy Court overseeing NextWave’s reorganisation and by the US Federal Communications Commission (FCC).
‘This agreement represents a major step forward in our reorganisation process,’ said Allen Salmasi, NextWave’s Chairman and CEO. ‘The proceeds of the deal will enable us to satisfy a significant portion of our obligations to the government and to other creditors.
‘The transaction strengthens NextWave’s capitalisation and positions the company to complete its reorganisation and initiate the build out of its next generation broadband wireless network in a significant number of major markets, including New York, Los Angeles, Washington, DC, and in other markets around the country.’
Under terms of the deal, Cingular would pay $1.4 billion in cash, and obtain FCC authorisation to operate on 10 MHz of broadband PCS (1900 MHz) spectrum in towns and cities across the US.
The two companies will present the offer to the US Bankruptcy Court for the Southern District of New York for its approval. NextWave voluntarily initiated bankruptcy reorganisation procedures in June 1998.