article

Cingular Seeks toBuy NextWave Licenses

Posted: 10/2003


Cingular Seeks to
Buy NextWave Licenses


By Josh Long

Cingular Wireless, the second largest U.S.
wireless carrier, has agreed to pay would-be carriers carrier NextWave
Telecom Inc. $1.4 billion for spectrum licenses to provide service in 34
markets.

Atlanta-based Cingular says the licenses primarily cover
territories where the wireless carrier provides voice and data services.
Cingular, the joint venture between BellSouth Corp. and SBC Communications Inc.,
says it provides services in all the regions where it plans to acquire licenses
except Portland, Ore.; Salt Lake City; El Paso, Texas; Manchester, N.H.; Hagerstown and Salisbury,
Md.; and Kankakee, Ill.

While this deal allows Cingular to enhance our spectrum
position in many of our larger existing markets, it is primarily for future
growth of the company, says Mark Feidler, COO of Cingular Wireless. This spectrum
will allow us more room to provide additional services and products, to expand
coverage in some of our key markets and to better accommodate overall growth.

The proposed agreement is subject to higher offers, and an
auction was scheduled for Sept. 22 in the event competing bids were submitted.

Verizon Wireless has evaluated the possibility of bidding for
the spectrum, according to Reuters News Agency quoting President and CEO Dennis
Strigl. Verizon Wireless spokesman Jim Gerace declined further
comment. We continue to look for opportunities on spectrum, he told
PHONE+.

NextWave, which filed for bankruptcy in 1998, says the
agreement with Cingular marks a key step in its reorganization plan. The
proceeds of the deal will enable us to satisfy a significant portion of our
obligations to the government and to other creditors, says Allen Salmasi,
chairman and CEO of NextWave. The transaction strengthens NextWaves
capitalization and positions the company to complete its reorganization and
initiate the build-out of its next-generation broadband wireless network in a
significant number of markets, including New York, Los Angeles, Washington D.C.,
and other major markets around the country.

The FCC and the bankruptcy court overseeing NextWaves
reorganization must approve the agreement. In its bankruptcy filing, NextWave
listed approximately $4.3 billion of debt owed to the federal government.
NextWave also listed about $400 million in debt owed to private companies.

NextWave has filed three reorganization plans over the years,
but none of those plans have been confirmed by the bankruptcy court as a result
of litigation between NextWave and the government, says NextWave senior vice
president and deputy general counsel Michael Wack.

In January, the Supreme Court ruled the FCC did not have
authority to revoke spectrum licenses from NextWave because the company was
operating under bankruptcy court protection.

Wack says NextWave hopes to file a reorganization plan later
this year.

Links
Cingular Wireless www.cingular.com
NextWave Telecom Inc. www.nextwavetel.com
Verizon Wireless www.verizonwireless.com

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