NTELOS exiting Hampton Roads, Richmond markets next year
Waynesboro-based NTELOS said Tuesday it plans to pull out of its Eastern markets next year, a move that will impact Hampton Roads and Richmond. The telecommunications company said it aims to exit the Eastern market by November 2015 and focus on its markets in West Virginia and western Virginia.
“In an effort to strengthen our retail sales performance and leverage our strategic relationship with Sprint, we are right-sizing our business and redirecting our resources on our Western Markets, which provide us the greatest opportunity for sustained, profitable growth. At the same time, we are exiting markets that have become increasingly competitive and where we have been unable to achieve acceptable financial returns,” Michael A. Huber, chairman of the board of NTELOS, said in a statement.
NTELOS plans to sell its Eastern market wireless licenses to T-Mobile for $56 million in cash. The transaction – which is subject to customary closing conditions, including regulatory approval by the Federal Communications Commission – is expected to close April 2015. NTELOS also will wind down its network and retail operations in its Eastern Markets over the next year. This is expected to include a transition of its subscribers to another carrier.
In its Western markets, NTELOS intends to expand 4G LTE services, improve retail performance and enhance service. The wind down and eventual exit from the Eastern market will give NTELOS more flexibility to invest in the Western market, the company says. The firm also is looking at opportunities to monetize other non-core assets, including the sale of owned towers and undeployed spectrum.
According to NTELOS, it currently has a total of 457,200 retail subscribers, 59 percent which are in the Western market. Sixty nine percent of its total cell sites are also in the Western market.
NTELOS expects to have an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $128 million and $132 million in 2014. It anticipates its capital expenditures this year will be about $105 million. For 2015, it expects to have an adjusted EBITDA between $100 million and $108 million.