Waynesboro, VA. – January 4, 2010 – NTELOS Holdings Corp. (NASDAQ:NTLS, news, filings), a leading provider of wireless and wireline communications services (branded as NTELOS) in Virginia and West Virginia, announced today that on December 31, 2009 it closed on its acquisition of certain fiber optic and network assets and related transport and data service revenues from Allegheny Energy, Inc.
The purchase includes approximately 2,200 route miles of fiber located primarily in central and western Pennsylvania and West Virginia, with portions also in Maryland, Kentucky and Ohio. There are currently two points of interconnection between the existing NTELOS fiber network and the transaction fiber assets, one each in Virginia and West Virginia. The purchase price for the transaction assets was approximately $27 million.
We are a leading provider of wireless and wireline communications services to consumers and businesses primarily in Virginia, West Virginia and Pennsylvania under the NTELOS brand name. We concentrate on providing services to meet the current and future communications needs of customers and that we believe represent high growth opportunities for us. Our wireless operations are composed of an NTELOS branded retail business and a wholesale business that we operate under an exclusive contract with Sprint Nextel Corp. Founded in 1897, our wireline business and its predecessor organizations have a long history of providing exceptional telephone service in rural Virginia.
Wireless Business
Our wireless business operates a 100% CDMA digital PCS network in Virginia, West Virginia, and portions of Kentucky, Ohio and North Carolina. We began acquiring PCS spectrum in western Virginia and West Virginia in June 1995 and began operations in Virginia in late 1997 and in West Virginia in late 1998. We entered eastern Virginia in July 2000 with the acquisition of the eastern Virginia assets of PrimeCo Personal Communications, L.P.
We have implemented a diversified wireless strategy consisting of a traditional retail model coupled with our wholesale Strategic Network Alliance with Sprint Nextel. Both businesses leverage the same wireless network and back office infrastructure. Retail provides opportunities for growth through continued subscriber acquisition under the NTELOS brand name. Wholesale provides predictable and high growth revenue and cash flow streams from Sprint Nextel with minimal investment in customer service and no investment in customer acquisition. Together, we believe these operations provide a balanced and diversified portfolio with a strong growth potential.
We believe the NTELOS brand has strong name recognition in the markets we serve. Our western Virginia wireless region encompasses the area where we have been operating in the communications business for more than a century. We maintain a visible physical presence in our markets with substantially more retail locations than our competitors. While we do offer national calling plans at competitive prices, our wireless services are designed to provide exceptional value to customers who live and travel predominately in our wireless coverage area. Our unique coverage footprint allows us to offer greater monthly on-net usage than other regional or national providers at similar prices.
In June 2004, we began offering high speed data services in certain markets and in 2009, we completed network upgrades to offer EV-DO Rev A capability across our footprint. Data revenues have grown as a portion of total wireless revenues, and we believe there are opportunities for continued growth in data services.
Wireline Business
Our wireline business is divided into two operations, a Rural Local Exchange Carrier (RLEC) and Competitive Wireline, which consists of Competitive Local Exchange Carrier (CLEC), network and internet operations. As an RLEC, we own and operate two incumbent local telephone companies and serve three rural Virginia regions. As a CLEC, we provide service to areas in Virginia, West Virginia, Pennsylvania and portions of Maryland, Kentucky and Ohio where we focus almost entirely on commercial and institutional customers. Additionally, we offer leading-edge data transport services and broadband internet access across the region.
Our wireline business is supported by an extensive 4,500-mile fiber optic network that is used to back-haul communications traffic for our own retail services and to provide wholesale transport services to other telecommunications carriers for their long distance, internet, wireless and private network services.
Our ability to deliver a broad range of communications services over infrastructure that we control and maintain has been an important driver of our success. We focus on high-margin customers, including educational institutions such as colleges and universities, health care providers, regional financial institutions and governmental entities. We have been growing the wireline business by developing and introducing new IP-enabled products, including integrated voice/data access technology and metro Ethernet, increasing the penetration of value-added bundled voice and data services and enhancing the availability of broadband connectivity. We believe these initiatives have provided us with an enhanced competitive position in our regions and continue to provide us with growth opportunities for our wireline business.
Allegheny Energy
Headquartered in Greensburg, Pa., Allegheny Energy is an investor-owned electric utility with total annual revenues of over $3 billion and more than 4,000 employees. The company owns and operates generating facilities and delivers low-cost, reliable electric service to 1.6 million customers in Pennsylvania, West Virginia, Maryland and Virginia. For more information, visit the company’s Web site at www.alleghenyenergy.com.
Investor Contact:
Wesley B. Wampler
Director, Investor Relations
Phone: 540-949-3447
wamplerwes@ntelos.com
Media Contact:
Mike Minnis
Director, Media and Public Relations
Phone: 540-946-7290
minnism@ntelos.com
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