United States Cellular Corp.
), subsidiary of T
elephone & Data Systems Inc.
) has successfully completed its spectrum sale in its Midwest
). The agreement involves the sale of spectrum that supports Long
Term Evolution (LTE) coverage and services in key markets like
Chicago and St. Louis.
Under this deal, U.S. Cellular sold around 20 MHz of spectrum to
Sprint in Chicago and other key Midwestern markets, and 10 MHz of
bandwidth in the St. Louis market. The $480 million cash deal
struck in Nov 2012, with Sprint also incorporates the handover of
approximately 585,000 customers, accounting for about 10% of U.S.
Cellular's customer base to Sprint.
This transaction allows U.S. Cellular to continue operations
in these areas and add customers for the next two years after the
deal closure and Sprint to disburse costs incurred on such
SPRINT NEXTEL (S): Free Stock Analysis Report
TELEPHONE &DATA (TDS): Free Stock Analysis
US CELLULAR (USM): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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U.S. Cellular is focused on data service expansion by
incorporating the 4G LTE technology. In Mar 2012, the company
rolled out its first LTE services and now plans to cover
approximately 87% of its subscriber base by year-end 2013. In
context to this, the company has been persuading several
strategic deals that allow it to leverage its network operation
by optimizing spectrum requirement.
Prior to the Sprint deal, U.S. Cellular rolled out similar
) in Sep 2011. The company underwent a spectrum swap with Verizon
Communications that provided it with eighteen 700 MHz spectrum
licenses covering eight states.
We believe these spectrum deals allow the company to improve cost
and profitability while managing network efficiency and data
Following this news, the company's board of directors approved a
special dividend of $5.75 per share, amounting to $481 million,
payable on Jun 25 to shareholders of record as of Jun 11.
Currently, U.S. Cellular has a Zacks Rank #3 (Hold).