Regional telecommunications provider Ntelos said it has reached a settlement with network partner Sprint regarding disputes in their “strategic network alliance,” that had previously been noted as billing related.
While terms of the agreement were not released, Ntelos noted the settlement resolved the issue, “including the data rate reset dispute that began in the fourth quarter of 2011 and the unrelated historical billing disputes that were raised in the third quarter 2012.” Ntelos touched on that latter issue last year, explaining it involved outstanding billing issues in the range of $8 million. Ntelos struck a network alliance deal with Sprint in 2007 covering CDMA services that is set to run through 2015, reporting that the agreement provides a minimum of $9 million per month in revenues.
“Today’s announcement further strengthens our relationship by revising and simplifying a number of terms from the original agreement, which we expect will allow Ntelos to maintain wholesale revenue at levels consistent with recent quarters and by establishing a basis from which we can extend and expand our partnership beyond the current term,” noted Ntelos Holdings CEO James Hyde, in a statement.
Ntelos added that with the settlement, it expects to recognize $9.6 million in additional adjusted earnings before interest, taxes, interest, depreciation and amortization for the current third quarter, and raised its full-year adjusted EBITDA guidance by $10 million.
The news sent Ntelos stock (NTLS) soaring nearly 9% in early Wednesday trading.
Ntelos has a long history in working with Sprint dating back to 1999, and is the exclusive provider of services running across the 1.9 GHz spectrum band on a wholesale basis to Sprint customers in portions of Virginia and West Virginia.
Concerns were raised last month that Sprint might be looking at an overbuild of LTE services across Ntelos’ markets beginning next year. That news sent Ntelos’ stock plunging as investors worried about future roaming revenues.
Ntelos has said it remains on track to launch commercial LTE services across portions of its network during the second half of this year. The carrier had previously announced plans to have 70% of its potential customer base covered with LTE services by the end of 2014, with the network serving both its own customers as well as roaming customers from Sprint. Ntelos noted that devices for the network would support Band Class 2, 4 and 25, hinting that the LTE service would tap into the traditional 1.9 GHz spectrum (Band Class 2) currently used to support its CDMA-based network as well as that of Sprint; Ntelos’ 1.7/2.1 GHz spectrum holdings (Band Class 4); and the G-Block 1.9 GHz spectrum (Band Class 25) that Sprint is using for its initial LTE rollout. Ntelos is currently using the approximately 23 megahertz of 1.9 GHz spectrum to support its CDMA services, with approximately 20 megahertz of 1.7/2.1 GHz spectrum that has yet to be deployed.
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