Sprint to buy affiliate, wireless spectrum

? Sprint Nextel Corp. went shopping Friday, announcing plans to buy one of its remaining affiliates and a smaller cell phone company to bulk up its wireless capacity.

The Reston, Va.-based telecommunications company said it was buying affiliate Enterprise Communications Partnership of Columbus, Ga., for $98 million. The deal also requires Sprint Nextel to spend $2 million to acquire wireless spectrum licenses from one of Enterprise’s affiliates.

Sprint Nextel also said it would acquire Woodbridge, N.J.-based Velocita Wireless for an undisclosed amount in a stock purchase agreement.

Sprint Nextel said the Enterprise acquisition, expected to close in the first quarter of next year, provided the company with 52,000 direct subscribers in Georgia and Alabama. Enterprise reported $54 million in annual revenue for the fiscal year ending in September.

This is the fifth affiliate that Sprint Nextel, which has its operational headquarters in Overland Park, has acquired since Sprint bought Nextel Communications Inc. in August, creating the third-largest wireless provider in the nation.

Like several other former Sprint Corp. affiliates, Enterprise sued Sprint before the Nextel acquisition, claiming that by acquiring Nextel, Sprint would violate its agreement not to compete with its affiliates in their territories.

Sprint Nextel spokesman Nick Sweers said that litigation was on hold until the deal closes and would be dismissed afterward.

The Velocita purchase, expected to close in the first half of next year, is more strategic, providing 400,000 business and governmental customers but also giving Sprint more 900-megahertz spectrum for its Nextel-branded iDEN network, which is separate from its Sprint PCS network. Sprint Nextel spokesman James Fisher said the company planned to modify to the iDEN network soon and having additional bandwidth during that time “is very desirable.”

Velocita is controlled by an affiliate of Cerberus Capital Management LP of New York.

Bear Stearns analyst Philip Cusick called the Enterprise acquisition “a tiny deal for Sprint” but said affiliates holding out for deals, such as Conshohocken, Pa.-based UbiquiTel Inc., could be concerned by the relatively cheap price. Cusick said Sprint Nextel would acquire Enterprise for $1,900 per subscriber, compared with $2,905 per subscriber the company planned to pay for Alamosa Holdings Inc., its largest affiliate.

Sprint Nextel shares lost 37 cents to $24.53 in trading Friday on the New York Stock Exchange. The stock has traded in a 52-week range of $21.57 to $27.20. UbiquiTel shares gained 1 cent at $9.87 in trading on the Nasdaq Stock Market, toward the high end of its 52-week range of $6.12 to $10.13.