Sprint Nextel to buy some of US Cellular's spectrum, customers for a $480 mn

Sprint Nextel Corp, the third-largest mobile phone service provider in the US, yesterday said that it will acquire United States Cellular Corp's spectrum and customers in some states in the Midwest in a $480 million cash deal in order to expand its coverage in the country.

The Overland, Kansas-based company, which last month agreed to sell a controlling stake to Japan's Softbank Corp for $20 billion, will acquire PCS spectrum and customers of United States Cellular in parts of Illinois, Indiana, Michigan, Missouri and Ohio, including the Chicago and St. Louis markets for $480 million in cash and the assumption of certain liabilities.

Sprint said that the additional spectrum will be used to supplement its coverage in these areas as it continues to upgrade and roll out 4G LTE nationally.

Sprint will also get approximately 585,000 US Cellular customers, and US Cellular will continue its business operations outside of these markets following closing of the transaction.

''This transaction will enable us to strengthen our business and become a more robust competitor,'' said Dan Hesse, Sprint's CEO. ''Acquiring this spectrum will significantly increase Sprint's network capacity and improve the customer experience in several important Midwest markets including Chicago and St. Louis.''

Sprint has launched 4G LTE in 32 cities and expects that 4G LTE will be available in more than 115 additional cities in the coming months.

Sprint said that the transaction is subject to approval by the Department of Justice and the Federal Communications Commission, and expects the deal to close in mid-2013.