Ntelos CEO Sees Company as Strategic Asset Amid Dealmaking

AT&T Inc. (T)’s $1.2 billion deal for Leap Wireless International Inc. (LEAP) underscores growing demand for the wireless industry’s most coveted commodity: the airwaves needed to keep calls and data flowing over congested networks, said Ntelos Holdings Corp. (NTLS) Chief Executive Officer James Hyde.

AT&T’s offer for Leap last week represented an 88 percent premium over the prepaid mobile-phone provider’s market value. Hyde said the AT&T deal boosts the value of wireless carrier Ntelos -- a view shared by investors who are bidding up the stock amid takeover speculation.

“These transactions are being done at increased valuations,” Hyde said in an interview. “That’s always a good thing when you are a public company like Ntelos.”

Ntelos, based in Waynesboro, Virginia, rallied 6.1 percent to $17.81 at today’s close in New York amid speculation that it could be a target for AT&T, Verizon Wireless, T-Mobile US Inc. (TMUS) or Sprint Corp. (S)

AT&T moved to acquire Leap after MetroPCS Communications Inc., another prepaid competitor, was scooped up in May by Deutsche Telekom AG, which combined the carrier with its T-Mobile division. SoftBank Corp., meanwhile, acquired a controlling stake in Sprint on July 10 and is giving the carrier a $5 billion cash infusion to help it expand its network and potentially make more deals. Sprint also completed an acquisition of wireless-network partner Clearwire Corp. last week.

Six States

Ntelos serves about 450,000 retail customers as well as wholesale subscribers in Virginia, West Virginia, Maryland, Ohio, Kentucky and North Carolina. The company has agreements with Sprint and Dish Network Corp.

The carrier had $132 million in licenses for radio spectrum -- the airwaves that allow mobile phones to send voice calls and connect to the Internet -- at the end of last quarter, according to a filing. At today’s share price, Ntelos has a market value of about $380 million.

The licenses include spectrum in frequency bands know as PCS, AWS and WCS, with the PCS airwaves covering an area with a population of 7.9 million, according to the company’s annual report. Leap holds PCS and AWS spectrum covering 137 million people, it said last week.

“Just the mere fact that we provide wholesale services -- clearly, we’ve got a strategic set of assets,” Hyde said. He declined to comment on whether the company is in talks to be acquired.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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