T-Mobile USA will terminate its wireless network sharing joint venture with Cingular Wireless and instead acquire 100% ownership of the shared GSM networks in California and Nevada for $2.5 billion. The purchase price of $2.5 billion will be offset by $200 million related to the unwinding of the joint venture, resulting in a net cash payment of approximately $2.3 billion to Cingular. In addition, T-Mobile USA will:
- provide network services to Cingular under a wholesale arrangement until Cingular’s customers in these markets transition to the networks it will acquire through its pending merger with AT&T Wireless;
- replace its existing roaming agreement with Cingular with a new nationwide agreement with improved terms;
- transfer 10 MHz of New York spectrum in exchange for certain California spectrum owned by Cingular as specified in the termination provisions of the joint venture agreement;
- acquire an additional 10 MHz of spectrum from Cingular in certain key California markets for $180 million; and
- receive an option to acquire an additional 10 MHz of spectrum in other key California markets from Cingular within two years.
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