Sprint to Acquire Northern PCS Services
NEW YORK -- Sprint Nextel Corp. agreed to acquire Northern PCS Services LLC for $312.5 million, bringing Sprint Nextel a step closer to settling its outstanding disputes with its wireless affiliates.
The $35 billion merger between Sprint and Nextel -- which formed the nation's third-largest wireless carrier when it closed in 2005 -- has caused a number of headaches for the combined company. One of those complications came from the outcry from its affiliates, who saw their competitive position compromised by the deal. With Northern, Sprint has now acquired six of the nine affiliates, but still looming is IPCS Inc.
The Northern deal, which includes $5.3 million in debt, puts to bed the legal dispute between Sprint and Northern. Sprint expects the acquisition to close in the third quarter.
Sprint's nine affiliates and Nextel's Nextel Partners affiliate initially balked at the merger, arguing that the deal violated their exclusivity agreements to be the sole providers of wireless service in their respective territory. The disputes often sank into bitter legal fights, which complicated Sprint's ability to integrate its two wireless services.
The Reston, Va., company has mostly dealt with the affiliates by acquiring them, but three remain. Of the three, IPCS is the largest. Northern serves 167,000 direct wireless customers and 69,000 reseller customers in four Midwest states. In comparison, IPCS serves roughly 590,900 subscribers across seven states.