Sprint announced today the it has completed its tender offer for smaller mobile operator iPCS. The sale has overcome earlier legal obstacles to settle for around $830 million.
Who is iPCS?
It’s an affiliate of Sprint that offers a PCS mobile service – and not the International Playing Card Society, as one might think. “PCS” stands for Personal Communication Service and is just one of the many frequency bands that has been set aside for mobile use over the years. It was created in 1994, when the previous frequency allotment for mobile turned out to be not nearly enough. Probably the most well-known PCS operator is MetroPCS, which runs a CDMA network in those bands.
What is Sprint doing?
iPCS currently runs all of it’s service through the Sprint network anyway. It has an exclusive contract with Sprint to sell mobile services in 81 different networks. The operator has managed to acquire over 700,000 subscribers by the middle of this year. Sprint, evidently sensing a good thing, is buying the entire affiliate wholesale at $24 a share. And seeing as iPCS sells under Sprint branding anyway, it’s not like the customers will know any better!
What we think?
This really does remind of the Lenovo story that is happening at the moment. Here we have a free-standing but affiliated company. Once it starts doing well enough, it gets drawn closer into the heart of the company.
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