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Summary:

Sprint’s buyout of U.S. Cellular in Chicago and St. Louis closed Friday, and it won’t keep its networks running for long. Customers can either trade in their U.S. Cellular devices with Sprint or look for a new carrier.

In the next few months, 420,000 U.S. Cellular customers in the Midwest will find themselves without a mobile network. Sprint on Friday closed a $480 million deal with U.S. Cellular that will hand all of the latter’s spectrum in Chicago, St. Louis and the surrounding regions into Sprint’s waiting arms.

This is no mere transfer of network title, though. Sprint plans to shut down U.S. Cellular’s network completely some time in those two metropolitan regions in the next several months (Champagne, Ill., and South Bend, Ind., will also be affected). And despite the fact that U.S. Cellular’s systems uses the same CDMA technology in the same PCS frequencies, Sprint isn’t supporting its existing handsets. All of those customers must either start over with new devices and new service plans on the Sprint network or go find a new mobile operator entirely.

Sprint Regional VP for the Midwest Kevin Gleason told GigaOM that Sprint planned to make the transition as easy as possible for U.S. Cellular’s customers by offering them plenty of incentive to move to Sprint.

“I believe our recapture rate will be high,” Gleason said. “We’ve already started communicating with them and several of them have already made the switch.”

Sprint has sent out an initial batch of letters notifying them about the transaction but Gleason said Sprint will soon follow up, detailing the timing of the network shutdown and the discount offers Sprint is making to draw those customers under the Sprint umbrella.

While Gleason wouldn’t give any specific details on the exact amount of the discounts, he said they would take many forms: device discounts over Sprint’s usual subsidies, trade-in fees for older phones, porting credits for making the switch and activation fee waivers.

sprint-iphoneMany customers will be able to get new phones and comparable service plans without having to pay a dime, he said. Many will also be able to upgrade to fancier devices such as the iPhone 5 or Samsung Galaxy S 4 for a much lower than price than other customers would pay, Gleason said. He added that switching customers would also have a great deal of flexibility in plan choices, since Sprint is extending the discount offers to its Boost Mobile and Virgin Mobile prepaid brands as well.

In general, Sprint and U.S. Cellular’s contract plans are comparable, and in the case of its unlimited data plans, Sprint is actually cheaper. But depending on the circumstances, not every customer will be getting an equitable deal.

For instance if you happen to have just bought a new high-end smartphone or tablet, Sprint incentive discounts won’t cover the full cost of replacing it. What’s worse is that brand new smartphone essentially become useless in a few months when the Chicago and St. Louis networks go dead (though it would work on U.S. Cellular’s other networks). Some customers may also balk at the idea of signing new two-year contracts if they want to take full advantage of the discount offers.

Gleason acknowledged that some customers will feel like they’re getting a raw deal, but he expects those cases will be kept to minimum. He pointed out that 60 percent of U.S. Cellular customers in affected cities have let their contracts lapse and the large majority of them use feature phones. Those subscribers are ripe for an upgrade, he said.

U.S. Cellular FieldThat’s one of the main reasons why Sprint opted for a wholesale replacement of U.S. Cellular’s networks and devices, rather than a gradual phase out like Sprint is doing with its Nextel iDEN network, Gleason said. So many of those U.S. Cellular devices are old or obsolete that it decided to start fresh with phones optimized for Sprint’s new Network Vision architecture, which boasts the most up-to-date CDMA and LTE technologies.

We’ll know more details about the sunset timeline and the specific discounts in the next couple of weeks. And if you’re a Chicagoan, you’re probably wondering what will happen to the name of U.S. Cellular Field, the home of the White Sox, now that the carrier is leaving the city. Well, it won’t become Sprint Field. Gleason said U.S. Cellular is keeping the naming the rights.

U.S. Cellular Field hoto courtesy of Shutterstock user Alan Mars

  1. John Nemesh Friday, May 17, 2013

    As someone who has benefited MULTIPLE times from Sprint’s excellent customer service, I can honestly say that these customers have absolutely NOTHING to worry about! Sprint, unlike Verizon and AT&T, has no intention of becoming a “gatekeeper” to the internet. They have never blocked ANY app from running on their networks! They have some of the best plans available from any carrier, and they don’t throttle your connection or try to bill you by the byte!

    I have had handsets that were technically out of warranty and not covered by insurance replaced at NO COST, I have received free replacement chargers, and I have had billing errors corrected IMMEDIATELY with NO ARGUMENTS!

    I can’t speak highly enough of Sprint and their dedication to turning the company around, fixing their customer support issues (from several years back), and they are currently doing a complete overhaul of their infrastructure, making their network the MOST advanced of any US carrier. If they are offering extra discounts to help you transition away from US Cellular, you should jump on the opportunity!

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    1. Crime Scene America Saturday, May 18, 2013

      My roommate had Sprint and it was nothing but problems. Dropped calls and terrible connectivity. I went with Verizon.

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    2. You must work for Sprint…

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    3. Wow, you must be a sales person. I had Sprint a few years ago, and regretted ever having them as my phone carrier. Dropped calls, and no calls going through. I was able to proof my case and they let me out without paying the termination fee. A year and a half ago I gave them another chance thinking they had fixed their issues. What a mistake that was. After 7 months of poor signal, and dropped calls, I opted out of the contract. This time I paid the early termination fee and went with US Cellular. There is absolutely no way I will ever go back to Sprint even though they have very competitive pricing. I would rather pay a little more for no dropped calls, and good signal. Remember, you get what you pay for. Run away from Sprint while you can. USC, you really stuck it to us.

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      1. How did you provide proof and get out without paying the termination fee?
        I want out of sprint so bad!! And it’s bc of the same reasons. I have tried to find people to take over my contract but it never works out.
        Any suggestions???

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    4. cuntstevens Sunday, June 16, 2013

      Sounds like a sprint douchebag talking up his employer to me?

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    5. sorry to say but you must be brain dead to say that sprint is good and that their customer service is excellent!!!!! come on your as full of crap as Sprint is!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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    6. Sprint customer service is the worse!!! What are you talking about? You obviously work for them or something. I do not recommend Sprint at all. You get cheap service overall.

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    7. Sprint has the worst customer service!!! What are you talking about? You must work for Sprint. They are liars. We haven’t even been with them past the 14 days trial period and they were already giving us problems. Unlimited and unreliable network plus cheap customer service is all you will get. I have never experienced stress from any other cellular company. Verizon, AT&T and T-Mobile have excellent customer service. I just don’t recommend Sprint. I should have learned from my experience with them 10 years ago.

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  2. Andrew J Shepherd Friday, May 17, 2013

    Kevin, contrary to the statement in your article, Sprint is not shutting down USCC’s existing networks in the affected markets in the Chicago and St. Louis MTAs. USCC, itself, is doing that deed. And I was just in the FCC ULS database earlier today and found a filing in which Sprint is leasing the acquired spectrum back to USCC during this transition period.

    So, Sprint’s purchase price includes only spectrum and subs, not control over any infrastructure. Following my S4GRU article on the transaction last fall, I posted this interesting little tidbit:

    “…when USCC bought PrimeCo’s Chicago assets from a private equity firm in 2002, USCC paid $610 million. Now, Sprint is buying effectively all of that and more for $480 million. Missing from this deal, of course, is any network infrastructure, but Sprint does not need a redundant network. In the end, entering its home market looks to have been a bad financial proposition for USCC.”

    http://s4gru.com/index.php?/blog/1/entry-334-updated-sprint-uscc-spectrum-deal-sprint-gets-20-mhz-broader-in-the-city-of-broad-shoulders/

    AJ

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    1. Kevin Fitchard Saturday, May 18, 2013

      Fair point AJ,

      Sprint is buying the spectrum, not the infrastructure, but it amounts to the same thing. As soon as the lease runs out the network is effectively shut down since USM has no right to the spectrum any more. Could have been more careful with my wording, though, you’re right.

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  3. U.S. Cellular was great! Hate to see them go.

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  4. we’re screwed. glad we didn’t just buy new phones. several of our friends have…. and no one can match US cellular’s SIGNAL STRENGTH and Fantastic customer service. We are soooo bummed that US Cellular sold us out. It figures. If corporate america can screw things up by making bad decisions, they will. Now I am gonna have to climb a ladder and hang on to the roof to stay connected to my calls. WHY did you do this to us, USC????

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  5. Had sprint before, sucked then and it looks like they suck now. We’ve been with US Cellular for over 8 years and never had ONE problem. Just compared plans to what we have now (and in fact, I cant even GET 6 lines with Sprint) so 5 lines unlimited everything with all smartphones is going to cost me damn near $600 a month!!! AND I have to pay to replace all my smartphones?! Are you insane!?! and on top of that I get to deal with the sh** for brains sprint customer service? no thanks! I’ll be finding a new company. I hope Sprint falls flat on their faces with this deal. way to screw your new customers over from the get go! Just goes to show they havent changed their ways from when I had them before.

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  6. Disappointed Thursday, June 6, 2013

    What a crock! Just called running my credit spending hundreds of dollars for new phones and off shore customer service rep who doesnt understand what is foing on.
    Thanks US Cellular for screwing the Chicagoland Market!

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  7. As mentioned, only some will get a decent discount for new phones..but what good is a fancy new smartphone on a network with constant dropped calls and poor customer service!?!…US Cell customers run away from Sprint…You’re better choices are Tmobile or Verizon.

    Happy Former Sprint Customer

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  8. Fred G. Sanford Thursday, June 13, 2013

    For over 20 years Sprint service has been virtually non-existent in my area. I live in Chicago, one of the largest cities in the country and I get better reception on a country road in Ohio than I do in my neighborhood. Complaints are met by the same company line: we’re upgrading our towers in your area, a process that began in March of 1875 and should be completely shortly. The exact same areas are known to be dead zones and consistently drop calls. What do they do with their profits?

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  9. I have had US Cell for almost 9 years now and they do this to us… wtf… is wrong with them… I do not understand how such a BIG NAME like US CELL can just drop all of us and get away with it … I fell so sorry for the people that just got new phones, I just got phones last year not as bad as people who just bought one… that sucks for you guys sucks for us all… I love U S CELL but now this I feel like SUING them for this there is no reason for this…. I am one of the unhappy people losing my phone service I have paid for all these years and never missed a bill like so many others out there I -we have paid alot for this service and to be told to oh well to bad you have to get new phones and ohhhh sorry no breaks for that and we will just shut your phones down when we get a date dont no when it will be but it will happen so you better hurry and buy your new phones today…. I am just at a loss for words that I can type on here I scream them in my living room but I better not type them on here… they may shut my phone off tonight… clase action law suit… who s on

    borad

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  10. cuntstevens Sunday, June 16, 2013

    And another thing, The government wouldn’t let at&t purchase tmobile but sprint can buy u.s cellular? what a hypocritical country we live in.

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    1. Sprint is quite a bit smaller than At&t in terms of coverage and subscribers. Letting At&t purchase T-Mobile would essentially create a duopoly between them and Verizon, which would eventually squeeze out the competition and create havoc with pricing. Sprint did not buy US Cellular, it bought parts of it’s spectrum in certain market areas. The two situations are vastly different.

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