Verizon Wireless agreed to acquire all Nextwave Telecom's PCS licenses for $3 billion in cash. The agreement also provides for a breakup fee of 3% of the purchase price if the agreement is terminated under certain circumstances. The deal requires the approval of the bankruptcy court administering Nextwave's Chapter 11 proceedings. The purchase is expected to close by mid-2005.
The 10 and 20 MHz licenses, in the 1.9 GHz PCS frequency range, cover a population of 73 million people. The purchase price equates to $2.85 per MHz POP. The licenses will be used to expand Verizon Wireless' network capacity in 22 key existing markets, including New York, Boston, Washington, D.C. and Los Angeles, as well as to expand the company's footprint into Tulsa, Oklahoma.
Nextwave Telecom also presented the bankruptcy court with a reorganization plan that would consolidate all the company's liabilities and remaining assets -- including MMDS spectrum holdings and Tele*Code -- into a newly formed operating company, through which NextWave intends to develop, build and operate broadband wireless networks designed to provide both high-speed fixed/mobile Internet access and VoIP services. The plan also will provide for an additional payment to the FCC of approximately $71 million. http://www.verizonwireless.com
