Subject: [NEXTEL-1] Verizon Wireless to Buy Qwest Assets for $418 Mln

From: NEXTEL-1
Date: Fri, 02 Jul 2004 12:06:31 -0400

Verizon Wireless to Buy Qwest Assets for $418 Mln (Update3)

July 1 (Bloomberg) -- Verizon Wireless, the biggest U.S.
mobile-telephone carrier, agreed to buy Qwest Communications
International Inc.'s wireless assets for $418 million, adding call
capacity in cities including Denver, Phoenix and Seattle.
The agreement includes airwaves in parts of 14 states covering 30.8
million people, cellular towers and network-switch centers, Verizon
Wireless spokeswoman Nancy Stark said. The transaction will close in the
fourth quarter or early next year, the companies said in a statement.

Qwest's network uses the same technology as Verizon, which has been
seeking more spectrum. The sale will help Qwest Chief Executive Officer
Richard Notebaert in his effort to reduce the Denver-based company's
$17.5 billion of debt. Qwest has been seeking buyers for a year since it
stopped offering its own wireless service and shifted customers to
Sprint Corp.
``Verizon has managed to pick up a great asset at a very attractive
price,'' said Bruce Allen, a money manager at Cascade Financial
Management in Denver, which oversees about $300 million.

Qwest, the fourth-largest U.S. local-phone company, was ``not going to
be a dominant player in this region in wireless without substantial
investment,'' said Allen, whose firm owns shares of Qwest. It also owns
shares of Verizon Communications Inc. and Vodafone Group Plc, which
jointly own Verizon Wireless.

Shares of New York-based Verizon Communications fell 14 cents to $36.05
at 4:18 p.m. in New York Stock Exchange composite trading. Qwest rose 3
cents to $3.62. The companies announced the deal after the close of
regular U.S. trading.

Moving to Sprint

The agreement between Verizon Wireless and Qwest was struck ahead of a
planned auction of the assets next week, Qwest spokesman Tyler Gronbach
said. Qwest said a year ago it would sell its airwaves and cellular
towers after agreeing to move its 1 million wireless customers to
Sprint's network.

The transaction requires government antitrust clearance and approval
from the Federal Communications Commission, Stark said.

More Opportunities

Bedminster, New Jersey-based Verizon Wireless and other carriers have
more opportunities to buy radio-airwave licenses to add network capacity
for calls and wireless-Internet services. Verizon Communications Chief
Executive Ivan Seidenberg said in April the company is ``always on the
prowl'' for spectrum.

NextWave Telecom Inc., which in April agreed to return most of its
airwave rights to the U.S. government to settle a legal dispute, is
holding its own auction of six licenses in the same frequency band that
the company values at $1.08 billion. NextWave, which is trying to exit
bankruptcy, set a deadline of Tuesday for initial bids, with the auction
scheduled for July 8.
In a research note last week, RBC Capital Markets analyst Jonathan Atkin
estimated the auction may fetch $2.1 billion. Lehman Brothers Inc.
analyst Blake Bath and Bear Stearns Cos. analyst Phil Cusick wrote in
separate reports that Greenwich, Connecticut-based NextWave's valuation
may be too high.

The FCC has scheduled a Jan. 12 auction of 234 cell-phone airwave
licenses. Of those, 155 previously belonged to NextWave and fetched $5.9
billion in bids, later voided, from Verizon Wireless and other carriers
in a 2001 re-auction. The FCC seeks total minimum opening bids of $751.2
million for the 234 licenses.
The FCC auction may raise $4.4 billion, Atkin said.

To contact the reporter on this story:

Scott Lanman in Washington at  [email-masked]

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a30PyTHTKAOE&refer=us

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