U.S. Cellular said it is selling its Chicago, St. Louis and central Illinois markets, as well as three others in the Midwest, to subsidiaries of Sprint Nextel Corp. in a $480 million deal.
The sale includes PCS spectrum and approximately 585,000 customers, or about 10 percent of U.S. Cellular’s total customer base.
Upon completion of a transition period, the majority of the company’s retail stores, engineering and business support in these markets will be closed, the company said. The Chicago-based company said it will transition its Bolingbrook customer call center operations to an existing vendor partner, effective Jan. 1.
However, U.S. Cellular said it will continue to have more than 1,400 associates in the Chicago area at its Chicago headquarters and additional facilities in the surrounding suburbs.
U.S. Cellular hopes the sale will allow it to increase focus on markets where it has strong positions and streamline operations to increase overall efficiency and effectiveness, according to a statement released Wednesday morning.
"Our customer-focused business model is possible because of the dedication of our passionate associates,” U.S. Cellular CEO Mary Dillon said in a statement. “Given how these decisions affect associates, they were not taken lightly."
The company said it remains committed to Chicago, including the naming rights on the home field for the White Sox, U.S. Cellular Field.
"We have a long-term relationship with the White Sox," David Kimbell, chief marketing officer at U.S. Cellular, said Wednesday morning. "Even after this transaction, we're going to have 1,400 associates in Chicago so that relationship (with the White Sox) is not part of that deal and will not be changing."
The acquisition should give a needed boost to the network of No. 3 Sprint, based in Overland Park, Kan. Sprint doesn't have as much available spectrum, or space on the airwaves, as the larger carriers do. That holds back its network speeds somewhat.
The acquisition, which remains subject to regulatory approval, is expected to close in the middle of next year.
Also on Wednesday, U.S. Cellular said its third-quarter net income dropped 43 percent, as the company subsidized sales of new smartphones.
U.S. Cellular earned $35.5 million, or 42 cents per share, down from $62.1 million, or 73 cents per share, in the same quarter last year. Revenue rose 3 percent to $1.14 billion.
Sprint shares fell 4 cents to $5.69 in premarket trading. U.S. Cellular Corp. shares were unchanged from Tuesday's close of $39.02.
-- The Associated Press contributed.
U.S. Cellular exiting Chicago market
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U.S. Cellular exiting Chicago market
