Following the closing of T-Mobile and Sprint’s merger earlier this month, it’s been revealed that T-Mo may end up acquiring a regional Sprint affiliate as well.
Shenandoah Telecommunications, aka Shentel, has revealed that it’s in negotiations with T-Mobile to continue on as an affiliate of T-Mo post-merger. Shentel has been operating as an affiliate of Sprint since 1995 and has more than 1 million wireless customers in states like Virginia, West Virginia, Maryland, and Pennsylvania.
In a filing with the SEC, Shentel explains that its affiliate agreement gives its 90 days to negotiate with T-Mobile about staying on as an affiliate. If no agreement is reached between the two, then T-Mobile will have 60 days to decide if it wants to purchase the assets of Shentel’s wireless business for 90% of its entire business value.
If T-Mobile does not purchase Shentel’s wireless business, then Shentel will have 60 days to buy the legacy T-Mobile network and subscribers in its service area. And finally, if Shentel does not buy those assets, T-Mobile must sell or decommission its legacy network and customers in Shentel’s service area.
Neither T-Mobile nor Shentel have given any official indication about the negotiations or what they expect to happen. Analysts at Raymond James speculate that T-Mobile may want to work through the process quickly, while analysts at B. Riley FBR feel that T-Mobile is likely to buy Shentel’s wireless business.