Boston, MA 05/09/2014 (wallstreetpr) – Cincinnati Bell Inc. (NYSE:CBB) a leading provider of telecommunications and broadband network services has reportedly entered into an agreement with Verizon Wireless for the sale of Wireless Spectrum Licenses and other related assets. Cincinnati Bell approximates the transaction to be worth $210 million worth of assets. For a nominal charge, Cincinnati Bell will lease the spectrum for a given period following full closure of the transaction.
Transaction Terms
Cincinnati Bell will consequently wind down its wireless network operations and assist its current customers for a smooth transition into Verizon Wireless network. CBW will also notify its customers on any information regarding the transition and provide any needed assistance. The transactions is an important step for the company as it will accord it with time to focus on core operations of Cincinnati Bell Inc. (NYSE:CBB).
Cincinnati Bell has agreed to sell all its rights title and interests in the wireless spectrum for a cash consideration that could reach as high as $194 million. The sell will also see Cincinnati Bell continuing to provide wireless services for up to 12 months from the time of the signing. Proceeds from the sale will be used to offset one-time fees associated with the closure of the business.
Increased Competition Prompting Sale
Verizon wireless has also entered into an agreement to acquire a spectrum of licenses being sold by Cincinnati Bell to Grain Management. Cincinnati Bell Inc. (NYSE:CBB)towers lease arrangements are not included in the agreement with Grain management. As a result of the transaction, Cincinnati Bell, will consequently absorb some overhead and shared service costs attributed to the wireless operations.
The sale of the licenses comes at a time that it has become extremely difficult for Cincinnati Bell Inc. (NYSE:CBB) to invest in the industry amidst increased competition from big players with large networks. The transaction will thus enable Cincinnati Bell to meet the growing demand for Fioptics suite of products.
