US rural mobile player Shenandoah Telecommunications (Shentel) reached an agreement to acquire rival nTelos Holdings, in a deal that will see the two Sprint affiliates combine.

Shentel will pay approximately $208 million in cash for nTelos, while also assuming the company’s net debt, in a transaction valued at approximately $640 million, according to nTelos.

Shentel said in a statement it will acquire all of nTelos’ stock and operations, including wireless network assets and retail stores, while completing plans to close down the company’s Eastern operations.

It will also upgrade the remainder of nTelos’ network to 4G, and deploy an additional 150 cell sites to expand coverage.

Concurrent to the merger, Shentel also entered into a series of agreements with Sprint, including the expansion of its affiliate relationship with the US operator for a further five years, through to 2029.

“This will result in the nTelos brand being discontinued after closing”, said nTelos in a statement, with its 298,000 wireless retail customers set to become Sprint branded.

Retail stores will also convert into Sprint branded entities, which will be managed by Shentel. Its Strategic Network Alliance with Sprint, which sees nTelos provide wholesale roaming services for Sprint customers, will also come to an end.

Under the affiliate agreement, Shentel will serve approximately 581,000 additional customers.

Shentel president and CEO Christopher French said the deal, which is scheduled to close next year, will see Shentel become one of the top six public wireless providers in the US.

“This is an exciting time for our company,” he said. “This transaction more than doubles Shentel’s wireless customer base, enhances our presence in the Mid-Atlantic region by adding a highly complementary footprint and further strengthens our long standing partnership with Sprint.”

Sprint gains spectrum
Sprint, which was recently usurped by T-Mobile US in terms of connections to lose its position as the third largest US player, will “receive certain spectrum assets of nTelos”, paying Shentel up to $252 million over five to six years by “reducing the retained revenues that would otherwise be owed to Sprint under the affiliate agreement”.

Sprint will reportedly gain spectrum assets covering parts of Virginia, Pennsylvania, Maryland, Ohio, Kentucky and North Carolina.