Goin’ mobile

T-Mobile USA is to terminate its wireless network sharing joint venture with Cingular Wireless and to acquire 100% ownership of the shared networks in California and Nevada for $2.5 billion.

T-Mobile USA, the mobile communications subsidiary of Deutsche Telekom, is to terminate its wireless network sharing joint venture with Cingular Wireless and to acquire 100% ownership of the shared networks in California and Nevada for $2.5 billion.

The purchase price for the GSM network will be offset by $200 million related to the unwinding of the joint venture, resulting in a net cash payment of approximately $2.3 billion to Cingular.

T-Mobile USA will provide network services to Cingular under a wholesale arrangement until Cingular’s customers in these markets make the transition to the networks it will acquire through its pending merger with AT&T Wireless Services.

T-mobile will also replace its existing roaming agreement with Cingular with a new nationwide agreement with improved terms and transfer 10 MHz of New York spectrum in exchange for certain California spectrum owned by Cingular.

It will also acquire an additional 10MHz of spectrum from Cingular in in San Francisco, Sacramento and Las Vegas for $180 million and receive an option to acquire an additional 10MHz of spectrum in Los Angeles and San Diego from Cingular within two years.

T-Mobile USA will continue to have the use of Cingular’s spectrum currently used by the joint venture until Cingular’s customers make the transition off the networks.

The deal is subject to the approval of Cingular’s acquisition of AT&T Wireless by US anti-trust authorities and the Federal Communications Commission (FCC), and other regulatory approvals.

The transaction is expected to close at the beginning of 2005.

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