Verizon buys Northcoast PCS licenses

Verizon Wireless reached a deal with Northcoast Communications to purchase 50 PCS licenses and related network equipment for $750 million in cash.

The 10-MHz licenses cover more than 47 million potential customers and include some desirable markets along the East Coast and the Midwest including New York, Boston and Minneapolis. About $60 million of the gross proceeds from the sale will be used to retire Northcoast’s debt owed to the Federal Communications Commission.

Northcoast’s partners, including Cablevision Systems, will receive the balance.

Northcoast plans to keep some licenses, including its Cleveland market, where it has already launched an all-you-can-talk pricing plan similar to the business strategy of Leap Wireless.

Verizon Wireless said it would fund the purchase by drawing from an existing inter-company loan facility with Verizon Communications. Verizon Wireless CEO Denny Strigl has indicated the company is more interested in acquiring licenses from other players than merging with a competing wireless operator once the FCC lifts the spectrum cap in 2003.