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Sprint PCS lands 5 deals
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June 9, 1998: 11:16 a.m. ET
Wireless phone provider inks alliances in small markets; more to come
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NEW YORK (CNNfn) - Sprint PCS unveiled its new push Tuesday to gobble a bigger share of the wireless phone market by inking five affiliation agreements that will boost its small-market service area in seven states.
By latching on to the five local companies, Sprint PCS, the wireless phone arm of long-distance carrier Sprint Corp., hopes to defray the cost of outfitting smaller markets and focus on equipping metro areas itself.
The affiliation agreements, which are the first of many planned at Sprint PCS, are with local telecommunications companies and utilities in Georgia, Missouri, Louisiana, Ohio, South Dakota, Texas and West Virginia.
A total of about 8.8 million people live in the covered areas. The alliances culminate a long-laid strategy at Sprint PCS that has been two years in the making, executives said.
"What we're doing is affiliating with companies with a local presence which are below the 100 biggest markets in the U.S. for the purposes of getting the synergies of our brands with their local market share," Bernie Bianchino, Sprint PCS's chief business development officer, said.
AT&T Wireless, Sprint PCS's top rival, last year launched a similar strategy, but one based on equity stakes in telecom companies located in larger markets than those Sprint is willing to partner in, Sprint said.
An AT&T Wireless spokesperson did not immediately return calls seeking comment.
Bianchino said the local firms will market the PCS service and manage the infrastructure but customers will be billed by Sprint PCS.
To pave the way for Sprint PCS's entry into their local markets, the affiliates gave up -- in some cases at a loss -- the FCC licenses they owned, Bianchino said.
But, he said, they will share the revenues gained through the services with Sprint PCS and benefit from bulk purchasing deals it has as part of the agreements.
The companies involved in the deals with Sprint PCS are US Unwired of Lake Charles, La.; Roberts Wireless Communications LLC of St. Louis; Horizon Personal Communications Inc. of Chillicothe, Ohio; Georgia PCS Management LLC of Macon, Ga.; and Swiftel Communications in Brookings, SD.
Sprint PCS is currently undergoing a changeover of ownership, after Sprint agreed last month to buy up the stake of cable giants Cox Communications Inc., Comcast Corp., and Tele-Communications Inc. Sprint also plans to take the PCS unit public.
The venture said it is the only digital wireless company that has Federal Communications Commission licenses covering all of the United States.
Shares of Sprint (FON) were down 1/16 at 71-11/16 in early New York Stock Exchange trading Tuesday.
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