When they meant the T-Mobile Shentel deal for Shentel’s wireless network would close in the third quarter, they meant it. A statement was released at 12:00 AM on the first day of the third quarter announcing the deal has closed.
T-Mobile paid Shentel a total of $1.94 billion for its wireless unit, which operated as a Sprint affiliate. When T-Mobile acquired Sprint, it exercised an option to also acquire the wireless assets of Shentel. The plans were first announced back in August 2020.
According to the statement, the deal is inclusive of the approximately $60 million settlement of the waived management fees by Sprint Corporation, and net of certain transaction expenses.
There was a bit of negotiation with T-Mobile to get to the final price, which was settled in February. The Shentel wireless network operates in parts of rural Virginia, West Virginia, Kentucky, Ohio and Pennsylvania. According to a T-Mobile Form 8-K filing, the area served is home to about 1.1 million subscribers.
As a part of the agreement, Shentel entered into a non-compete clause with T-Mobile for mobile wireless service, but with a transition services agreement, Shentel will continue to offer services related to wireless network maintenance and certain back-office and administrative support.
The T-Mobile Shentel wireless deal will cause Shentel to reduce its workforce by about 30%, or 340 employees, some of which should be offered positions at T-Mobile. The company reported back in April that the workforce reductions will incur approximately $1.7 million related to continuing operations and approximately $4.5 million related to discontinued operations.
With the wireless sale behind it, Shentel is focusing on expanding its regional mid-Atlantic footprint with fixed wireless, which operates as Beam Internet, and its competitive fiber business unit, which operates as Glo Fiber.
Shentel reported an average penetration of 15% for Glo Fiber, as of the end of 2020. It eventually plans to reach 300K homes passed by the end of 2026. Shentel reported adding 1,366 Glo Fiber subscribers in 1Q 2021.