Verizon Wireless Inc. announced yesterday that it agreed to buy a controlling stake of a rural mobile phone operation in northwest Virginia from Shenandoah Mobile Co.
Verizon, the largest mobile phone operator in the country, purchased a 66 percent stake in Virginia 10 RSA LP from Edinburg, Va.-based Shenandoah Mobile. The company declined to disclose the terms of the deal, but in a filing with the Securities and Exchange Commission, Shenandoah Mobile said the agreement was for $37 million in cash.
As of the end of September, Virginia 10 RSA had 7,352 customers in Clarke, Frederick, Page, Rappahannock, Shenandoah and Warren counties. The number of customers has declined from more than 10,800 at the end of 2000 to 9,440 at the end of last year, according to the SEC filing. Virginia 10 operates under the Shenandoah Cellular brand; last year the company contributed $20 million in revenue to Shenandoah Mobile, which owned 66 percent of it.
"It's a great market because it's right at the intersection of interstates 66 and 81," so it captures a lot of customers traveling into and out of Washington, said Brian Wood, a Verizon spokesman. "It's right smack dab in the middle of our coverage area."
Verizon, which has 31.5 million cell phone customers across the country, will be integrating the new operations with its own mid-Atlantic operations, he said. Virginia 10 RSA uses on analog technology, an older type of transmission that Verizon will upgrade, Wood said.
The deal is expected to close in the first half of next year.
Shenandoah Mobile wanted to get out of Virginia 10's business because it already operates a much larger Sprint PCS affiliate with more than 60,000 customers, and it wanted to focus more on that business, said Laurence F. Paxton, chief financial officer of Shenandoah Mobile, which is a wholly owned subsidiary of Shenandoah Telecommunications Co.