In a setup that Sprint PCS asserts is unique, Horizon Personal Communications. will resell another operator's service under the Sprint PCS name. One of the first Sprint PCS affiliates, Horizon serves markets in the Ohio Valley region and will begin offering service in the Shenandoah Valley next month.
"A lot of affiliates are looking for ways to expand their territories," said Scott Fisher, director of affiliate development for Sprint PCS. When Horizon looked into neighboring markets for expansion opportunities, it found CFW Communications, a CDMA operator that had roaming agreements with Sprint PCS. Rather than replicate CFW's existing network, Horizon worked with the operator to negotiate a wholesale arrangement.
"There was already one quality CDMA network, and that company was willing to share it. So why not?" asked Bill McKell, president of Horizon.
Horizon has confidence in CFW's commitment to quality because the companies' parent local exchange carriers have worked together before. In fact, the companies jointly negotiated an equipment deal with Motorola, the supplier of their wireless networks.
CFW also has good reason to maintain a fair agreement with Horizon. "They are motivated to keep costs reasonable and quality high to keep us from overbuilding," McKell said. As part of the affiliation agreement, Sprint PCS could demand that Horizon build its own network in the area, if CFW doesn't meet its standards. But CFW is anxious to meet Sprint PCS' standards so that it won't lose the revenue from Horizon.
"It gets down to two players basically paying for this network," said Michael Moneymaker, vice president and chief financial officer for CFW.
The markets that are served will benefit as well because they get an additional competitor but no overlapping cell sites.
Sprint PCS was willing to consider the unusual setup because it helps expand coverage into smaller markets.
"We have bitten off a good bite over the last few years," Fisher said.
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