Cincinnati Bell on Monday said that it had entered into an agreement to sell its spectrum assets to Verizon Wireless in a deal valued at $210 million.
The deal effectively means Cincinnati Bell will cease its wireless operations, although it will continue to operate for eight to 12 months from the signing of the deal. It also has its own landline operations. Verizon will pay $194 million in cash for the rights to its spectrum, take over certain liabilities, and honor several tower lease agreements.
The national carriers have been eager to bulk up on their spectrum holdings, which provides additional capacity at a time when wireless traffic is exploding. Cincinnati Bell's fate underscores the difficulties that smaller players have had in keeping up with the kind of network upgrades that consumers are expecting.
Cincinnati Bell will lease back some of the spectrum it is selling to help with the transition period, allowing it to wind down its wireless operations and move its customers over to Verizon Wireless. Cincinnati Bell will provide more information to its customers about the transition once the deal closes, which is expected to be in the second half of the year.
Verizon has entered into a deal to assign the rights to the spectrum to private equity firm Grain Management, and will lease some of the spectrum licenses.
A Verizon spokeswoman declined to comment beyond the press release.
Verizon shares slipped 0.7 percent to $47.71 in pre-market trading.
Updated at 6:17 a.m. PT: To clarify that it is ceasing its wireless operations, but will continue its landline business.