Sprint Scoops Up UbiquiTel

Light Reading reports that "Sprint Nextel Corp. (NYSE: S) announced that it has paid $1.3 billion for UbiquiTel Inc. (Nasdaq: UPCS), a wireless affiliate based in the thriving metropolis of Conshohocken, Pa." According to the article, "UbiquiTel is one of several companies that sued Sprint last year, arguing that Sprint's 2005 merger with Nextel -- and its plans to merge the two brands -- violated certain affiliate agreements. With this new deal, Sprint and UbiquiTel have agreed to stay any pending litigation."

Phil Redman at Gartner said, "Seems cheaper than litigation. After the Nextel acquisition (and even before) there was unrest in the affiliate markets. The business model wasn’t working. Now Sprint gains full control, just not top-tier markets."

The article notes "Sprint has chosen acquisition over litigation as an affiliate strategy. The company has been scooping up its affiliates, either squelching legal action or avoiding it. Sprint Nextel has paid $427 million for IWO Holdings; $287.5 million for Gulf Coast Wireless; $4.3 billion for Alamosa PCS Holdings; and $1.3 billion for U.S. Unwired. Sprint Nextel also bought former Nextel affiliate Nextel Partners for $6.5 billion.There are four remaining Sprint affiliates: iPCS, Northern PCS, Swiftel International, and Shenandoah Telecommunications Co. -- a.k.a. Shentel."