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.