Cogent To Scoop T-Mobile US's Wireline Business For Undisclosed Terms

  • Cogent Communications Holdings, Inc CCOI agreed to snap T-Mobile US, Inc's TMUS Wireline Business.
  • The financial terms of the transaction remain undisclosed.
  • T-Mobile expected to record a pre-tax charge of $1 billion in the third quarter of 2022 to cover the carrying value of the wireline business and liability for the contractual payments, Reuters reports.
  • The Wireline Business offers the legacy Sprint U.S. long-haul network that eventually provides an owned network asset to replace Cogent's current leased network. 
  • As part of the agreement, in addition to the fiber network and related assets and customers, Cogent will acquire certain liabilities associated with the business. 
  • Cogent will offer I.P. transit services to T-Mobile for 54 months following the closing date, and T-Mobile will pay Cogent $700 million for such services.
  • Under the contract, $350 million will be due in equal payments over the first 12 months after closing, and $350 million will be due in equal payments over the remaining 42 months.
  • The deal will go through a newly formed direct subsidiary of Cogent.
  • Cogent held $349.8 million in cash and equivalents as of June 30.
  • Recently, T-Mobile U.S. laid off workers in its network operations and engineering group.
  • The layoffs are a part of a restructuring program that eliminated thousands of jobs since the company merged with Sprint two years ago.
  • Price Action: TMUS shares traded higher by 1.09% at $143.45 in the premarket on the last check Wednesday.
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