FCC Approves Sprint/Shentel/nTelos Deal With Conditions
The FCC approved a complicated deal in which Sprint affiliate Shentel will acquire Sprint wholesale partner nTelos Wireless and spin off some of its assets to Sprint, including spectrum. In return, Sprint agreed to pay Shentel up to $252 million over five to six years. The FCC ordered Sprint to sell off some of the spectrum in markets in Virginia. The companies unveiled the deal in August (see 1508100063). The order was handed down Friday by the chiefs of the Wireless and International bureaus.
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The deal was expected to be approved by the FCC, industry observers said when it was announced (see 1508110067). Shentel said then the deal increases its customer base from 442,000 to more than 1 million and makes the company the No. 6 U.S. publicly traded wireless carrier.
“Based on our analysis, we find the potential for certain competitive harms arising from this proposed transaction,” the bureaus said in the order. “Sprint’s spectrum aggregation as a result of the proposed transaction raises some competitive concerns, specifically in a cluster of Virginia markets. These concerns are mitigated by the Applicants’ commitment, which we impose as a condition, to divest some of the spectrum being acquired by Sprint from NTELOS in certain markets in Virginia.”
Under the transaction, Sprint gets an additional 135 MHz of spectrum in 153 counties in all or parts of 38 cellular market areas (CMAs) in Kentucky, Maryland, North Carolina, Ohio, Pennsylvania, Virginia and West Virginia , the bureaus said. “Post-transaction, without taking any spectrum divestitures into account, Sprint would hold 64 to 240.5 megahertz of spectrum in total, in all or part of these thirty-eight CMAs.”
The order said seven markets raise concerns under the agency’s recently revised spectrum screen. Sprint, post-transaction, would hold as much as 240.5 MHz of spectrum, about 40 MHz above the newly revised screen of 199 MHz, the bureaus said. Sprint agreed to and must spin off spectrum in seven Virginia markets -- Bath, Bedford, Charlottesville, Giles, Highland, Lynchburg and Roanoke, the bureaus said. In each market, Sprint will have to sell off AWS-1 and, in some of the markets, 2.5 GHz licenses, the bureaus said.
The deal also raised concerns because it will mean the exit of nTelos as a competitive carrier, the bureaus said. But Shentel committed to upgrade its network to address those concerns, the order said. “Shentel has committed to invest up to $350 million in network infrastructure improvements within the current NTELOS service area to effectuate significant network upgrades and network expansion within five years of close.” Shentel also committed to “substantially complete the 4G LTE upgrades” for 857 nTelos cell sites within 24 months after the transaction closes, the order said.
"Shentel is very pleased to have received the approval from the FCC," Earle MacKenzie, Shentel chief operating officer, told us in an email. "Teams from Shentel, nTelos and Sprint have been working over the past eight months toward a smooth transition. ... The closing should take place within the next few weeks."