Sprint affiliate Shentel to buy regional wireless operator nTelos bringing customers and spectrum to Sprint
by Robert Herron
Sprint 4G Rollout Updates
Monday, August 10, 2015 - 10:30 PM MDT
What began as widespread speculation back in May came to fruition today. Shenandoah Telecommunications (Shentel) announced its intention to buy nTelos in a $208 million deal ($640 million total counting debt Shentel will assume). The purchase includes network, spectrum licenses, retail customers/stores and all assets.
Shentel is a regional affiliate for Sprint and provides wireless service in the Upper Shenandoah Valley of Virginia and West Virginia, the Maryland Panhandle and Central Pennsylvania. nTelos has been a wholesale partner to Sprint, selling capacity to Sprint customers in the Lower Shenandoah Valley and Blue Ridge communities of Virginia and most of the State of West Virginia.
nTelos coverage area is directly adjacent to Shentel with only a little overlap. nTelos coverage complements Shentel's very well. Shentel will have over one million customers in the newly combined company, making it the sixth largest wireless company in the U.S. and the largest Sprint affiliate.
At conclusion of the purchase, Shentel will take control of nTelos and its assets. nTelos will cease to exist, having spun off its wireline and fiber assets into Lumos Networks a few years back. So, the rural telco that reached the big time 15 years ago in the Richmond-Norfolk MTA when it purchased a PCS B block 20 MHz divestment from PrimeCo in the merger that created Verizon will be gone for good.
The writing was on the wall when nTelos sold off its spectrum to T-Mobile in its large markets of Richmond and Norfolk this past year. Bringing to end an era, as Shentel shutters nTelos' Waynesboro, Virginia headquarters and puts its campus up for sale. Choosing to consolidate the combined company at Shentel's Harrisonburg, Virginia HQ. The end of nTelos will be bittersweet for some, but likely not to be missed by many Sprint customers.
Shentel doubles down and re-ups with Sprint extending affiliation
In announcing the merger, Shentel concurrently released details of new extended and expanded affiliation agreements with Sprint that now to run through 2029. These separate deals call for the disbanding of nTelos and transfer of the existing nearly 300,000 nTelos customers to the Sprint brand. Existing nTelos retail locations will also be converted to Sprint branding while being managed by Shentel. Sprint will transfer their existing nearly 300,000 customers in nTelos territory into the Shentel affiliate agreement.
Most important in this deal is the significant impact on the Sprint network in the Shentel and nTelos territories. Sprint will receive “all spectrum assets in nTelos’ footprint.” This covers more than 5 million people in portions of Kentucky, Ohio, Maryland, North Carolina, Pennsylvania, Virginia, and West Virginia. Shentel will assume responsibility of nTelos' network upgrade and LTE deployment. Which will also include additional cell sites and coverage expansion.
Shentel's infusion into the current nTelos network is desperately needed
nTelos currently provides 1x voice and 3G EVDO data native coverage to Sprint customers in Western Virginia and West Virginia. nTelos was already in the process of trying to upgrade its network to 4G LTE through a slow and insufficiently funded process. In some areas, nTelos did have LTE open and live for its own nTelos branded customers. However, Sprint customers could not access it.
nTelos and Sprint expanded their wholesale agreement last year to include 4G LTE. Under the agreement, nTelos had until 2017 to get the network up and running for Sprint LTE customers, adding Sprint LTE bands using Sprint spectrum assets. nTelos current LTE deployed was not usable to Sprint customer handsets, as it runs on PCS LTE Band 2. And Sprint's is deployed on PCS LTE Band 25.
S4GRU hopes that Shentel will deploy MFBI to the newly acquired nTelos LTE network and open it up for Sprint/Shentel customers as soon as physically possible. This should be a priority, as Sprint customers in nTelos areas have been limited to mediocre 3G for years. And we have nearly countless stories of S4GRU members and visitors airing their frustrations and leaving Sprint or nTelos for the Duopoly. But the end is near!
nTelos may have a reputation for being way behind the times and struggling, but Shentel is viewed largely the opposite. Shentel has proven to be a well run regional wireless operator and has been on the forefront of its Network Vision upgrade with Sprint. Shentel outperformed virtually every Sprint market in deploying its network modernization upgrades and LTE deployment.
The Shentel affiliate market is arguably the best performing Sprint market in the country. Shentel is also aggessive in monitoring and maintaining its network. To keep capacity maximized, keep throughput speeds high and provide the most seamless coverage imaginable in a hilly and mountainous environment. Shentel makes Sprint look good in its region, providing coverage and performance surpassing AT&T and Verizon nearly everywhere.
Shentel plans an accelerated network upgrade
nTelos customers and Sprint customers in nTelos areas will likely be very pleased with the transition. If the network upgrades can happen fast enough. Shentel did commit to speeding up the process. On their website, they say...
Shentel said:"While nTelos was engaged in a network upgrade, Shentel is committed to accelerating and expanding the upgrade of the network in order to provide the Sprint customers the world-class wireless voice and data services they deserve."
Shentel is committing over $300 Million in network upgrades and enhancements to bring its newly acquired nTelos coverage areas to Sprint standards and add LTE Bands 25, 26 and 41 (Spark) into the mix. Shentel also will be adding approximately 150 new macro sites (identified in orange on the map at the bottom of the page). Shentel says that the additional coverage from the new sites will improve the experience for the Sprint customers it serves and be more consistent with the type of seamless coverage its existing customers experience in current Shentel service areas. Shentel wants to close the gap and provide a more competitive experience against AT&T, Verizon and U.S. Cellular. There are many customers that Shentel can gain in nTelos areas, as nTelos tends to have a much smaller market share than Shentel does in its markets.
The exact details and dates are still being finalized and pretty much are pending the conclusion of the purchase. Shentel expects to have the acquisition wrapped in six months -- but hopes it may be sooner. No significant government hurdles are expected with this transaction.
As part of the deal, Sprint will get nTelos varied spectrum license assets. nTelos currently holds spectrum in its coverage area in PCS, AWS and BRS bands. These will complement Sprint's spectrum portfolio very well. Sprint actively uses PCS for voice and 3G/LTE data and BRS for Spark LTE data. Shentel will be using existing and newly acquired licenses in its deployments. What is not known at this time is whether Sprint will sell or trade the Band 4 AWS licenses it will pick up -- or possibly put them to use. Most new Sprint devices since mid 2014 now support LTE in the AWS band, and Sprint could choose to keep these licenses.
What to take from all this
This is good news for Sprint customers and nTelos customers in Western Virginia and West Virginia. nTelos did not provide good service to Sprint customers in its area. And nTelos customers weren't all that pleased either. There was a steady drumbeat of complaints about nTelos in our forums.
Shentel is likely to face a lot of bumps in the road and some major setbacks along the course overtaking nTelos. But it will likely do a much better job along the way. Shentel is well managed from our perspective and better funded. Shentel hit its milestones early and is fairly proactive. The network is going to improve significantly. And once Shentel gets the reins, the progress will move much faster and be measurable. We think Shentel will do well if it can capitalize the upgrades sufficiently and timely. And this is all upside for Sprint.
We HIGHLY RECOMMEND that Shentel make opening up the existing nTelos LTE network for Sprint customers a number one priority. Though there is some cost and resources to do this, it will help reduce churn and start building excitement among the remaining Sprint customers in the area. We all need to see something is happening right out of the gate.
And Marcelo, if you're reading, please do something about your only other remaining affiliate, Swiftel up in South Dakota. It will be the last vestige of the Sprint network languishing without upgrades. Please, we are begging you! Maybe Shentel West?
CLICK MAP TO ENLARGE. Map showing Shentel's and nTelos' combined coverage (cyan) and Shentel's planned site locations (orange) to better compete with Verizon, AT&T and U.S. Cellular
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