Sprint buys Alamosa

Sprint Nextel today announced it has settled on acquisition terms with Alamosa Holdings, taking out of commission another litigant suing Sprint for allegedly breaking its affiliate agreements.

The price of averting legal action is high, though. Alamosa will cost Sprint $4.3 billion in cash and Sprint will have to assume the carrier’s $900 million in debt. Sprint has now agreed to shell out $7.2 billion to buy out affiliates that operate in territories served by the newly acquired Nextel. Those costs come in addition to cash Sprint shelled out as part of its $36 billion deal with Nextel as well as the capital outlay for integration between the two networks.

“This acquisition closes a long partnership with the management and shareholders of Alamosa,” Sprint president and CEO Gary Forsee said in a statement. “This transaction will significantly our direct customer base and territory, and will provide additional value for our shareholders.”

Of Sprint’s 18 regional affiliates—carriers that sell service under the Sprint name in markets Sprint doesn’t serve—at least seven have sued the newly merged Sprint Nextel, claiming that by offering Nextel service in their territories Sprint is violating their affiliate agreements. Sprint has responded by trying to buy up the companies. In July, even before its merger with Nextel closed, Sprint announced plans to acquire U.S. Unwired, its 500,000 customers and 48 markets in the southern states for $1.3 billion. In August Sprint agreed to buy two smaller affiliates IWO Holdings and Gulf Coast Wireless for a combined $714 million.

Alamosa, however, is Sprint’s largest affiliate with 1.48 million direct wireless subscribers and, according to Sprint, has the highest penetration and lowest churn rate of all of its affiliates. The carrier has a huge swathe of territory stretching from the Midwest to the Pacific Ocean. Sprint expects the deal to close in the first quarter