Verizon Wireless completed its $3 billion acquisition of NextWave Telecom Inc.’s 28 spectrum licenses covering approximately 73 million potential customers in 23 markets. NextWave said it has formally emerged from Chapter 11 bankruptcy proceedings following the closing of the spectrum sale to Verizon Wireless.
The spectrum deal, which was announced late last year, included nearly all of NextWave’s spectrum holdings that remained following the sale of 34 licenses to Cingular Wireless L.L.C. in early 2004 for $1.4 billion, an auction of three licenses to Verizon Wireless and MetroPCS Inc. last summer that generated nearly $1 billion and the return of dozens of licenses to the Federal Communications Commission as part of NextWave’s bankruptcy proceedings.
Verizon Wireless noted the spectrum licenses in the 1.9 GHz spectrum bands would be used to expand network capacity in 22 key existing markets-including New York, Boston, Washington, D.C., and Los Angeles-as well as expand the carrier’s footprint into Tulsa, Okla.
“We will put this spectrum to work in our network to benefit customers, by having the long-term capacity in place when they need it to meet their growing demands for wireless voice and data services,” said Denny Strigl, president and chief executive officer of Verizon Wireless. “This purchase is part of our long-standing strategy of continual network enhancements to provide our customers with the most reliable wireless network and, therefore, the most satisfying wireless experience.”
Verizon Wireless’ spectrum strategy included the recent acquisition of 63 spectrum licenses covering 52.7 million pops for $700 million during the FCC’s auction 58, as well as several large- and small-sized private spectrum deals.
NextWave, which still has a handful of spectrum holdings that it plans to use to launch wireless broadband services, added that it has begun distributing a portion of the transaction’s proceeds and new securities to shareholders and will continue to implement its “court-approved blueprint for entering the marketplace as a provider of broadband wireless services.”
“While making a very substantial cash distribution to shareholders, at the same time we are emerging with a strong balance sheet, an experienced and creative management team, substantial spectrum and network assets, and an innovative and well-timed plan to enter the broadband wireless market on a fully funded basis,” noted Allen Salmasi, NextWave chairman and CEO.
NextWave said it plans to launch a wireless broadband network using an IP-based technology initially in New York and Las Vegas, and plans to pursue a dual-use network strategy making its network available to government agencies for public-safety applications as well as commercial services for the consumer market.
