Will sell operations to Verizon.
Verizon buying network, which serves 340,000 customers.
Cincinnati Bell is selling its wireless phone business to Verizon Wireless in a deal worth about $210 million. See how customers are affected.
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CINCINNATI – Here's what Cincinnati Bell wireless customers need to know about the big changes coming once Bell's $210 million wireless sale to Verizon goes through next year.
➢ Customers don't have to do anything now. They will continue to get Cincinnati Bell wireless service for the next eight to 12 months, until the deal is complete, Bell says.
➢ When Verizon takes over in the first quarter of 2015, Cincinnati Bell customers can transfer to Verizon or another carrier of their choice with no termination fee.
➢ Customers can not transfer yet. "Right now, until the transaction closes, contracts are in force," says Mike Vanderwoude, Cincinnati Bell's vice president of wireless.
➢ Cincinnati Bell will continue to offer landline, Internet and TV bundles, but once the sale is complete, cell phones will no longer be a part of it. That means your cell phone bills may be higher starting next year.
> After the sale, Cincinnati Bell will no longer offer prepaid wireless phones.
Customers should look for a letter in the mail, Vanderwoude says. "Once the transaction is approved and closed, we will contact our customers and give them further instructions on how to transfer their service," he said.
See the FAQ below for more customer information.
Verizon will purchase Cincinnati Bell's wireless spectrum licenses and related assets by year's end.
Declining customers and high costs are pushing Cincinnati Bell out of the wireless business.
> Cincinnati Bell lost roughly 37 percent of its wireless customers between 2009 and 2013 - from 533,100 customers to 339,700.
> Five years ago, wireless revenues were $307 million, but now they're just over $200 million.
> Wireless represented 16 percent of company revenue in 2013, down from 21 percent three years ago.
CEO Ted Torbeck says the sale will allow Cincinnati Bell to focus on the company's Fioptics video and high-speed Internet services.
“This transaction is an important step toward increasing focus on our growing strategic product base,” Torbeck says in a press release . “It has become economically challenging for us to invest in our wireless business at the levels necessary to deliver best-in-class service to our customers. This transaction not only ensures that our customers have access to top-tier wireless service, but it also gives us increased flexibility to meet their growing demand for our Fioptics suite of products.”
Vanderwoude discussed the company's long-term strategy.
"On the consumer side, we plan to be a dominant video provider. We plan to be, through our Fioptics product, competing directly with our competitors on the video side," Vanderwoude says. "We'll have fiber to many homes. We'll have high-speed Internet service to many, many homes."
On the business side, Cincinnati Bell will also have its consulting and newly launched cyber security venture.
As odd as it seems that one of the city's oldest companies, founded in 1873 with 50 private telegraph lines, a company whose name is synonymous with the telephone, is getting out of the wireless phone business, Cincinnati Bell saw the texting on the wall.
In a February SEC filing, the company admitted to "substantial subscriber losses over the past several years due to a number of factors, including competitors' investment in more technologically advanced LTE networks, which the company does not have, and consumer preferences for national carriers and competitors' handsets."
Cincinnati Bell said it expected subscriber losses to continue. The company also pointed to problems with not owning the towers on which their wireless network was operating on, causing a potential "adverse impact on the wireless business as a whole, the quality of the wireless networks, and the ability to offer new competitive products and services."
Analyst Nick Puncer of Bahl & Gaynor says it makes sense for Bell to drop out of the wireless market because of the high cost of network expansion and upkeep.
"For Verizon, it's more of a drop in the bucket," Punceer says. "It's an issue of them being able to acquire the spectrum that CIncinnati Bell owns."
So now, Puncer says, Bell can to reduce its debt and invest in its growing Fioptics business.
"As it stands now, I think that 30% of their service area is served by Fioptics. Their goal is probably to double that number, which will take a fair amount of incremental investment," Puncer said.
Bell's Vanderwoude said the firm is spending $85 million on Fioptics this year on top of $300 million already spent.
"I don't know a (final) price tag, but probably in the $500 million to $600 million dollar range," Vanderwoude said. "We'd expect to be finished, I'd say, in the next three to five years."
RELATED: Declining wireless segment a longtime problem for Cincinnati Bell
Below are FAQs of the sale provided by Cincinnati Bell:
What exactly was announced on April 7, 2014?
Cincinnati Bell has entered into an agreement to sell our wireless spectrum to Verizon Wireless. We expect to operate our wireless
network for the next 8-12 months since this transaction must be reviewed and approved by government and regulatory agencies. Once the agreement is approved and closed, we will waive all applicable termination fees, provide handset unlock codes and assist you with the transition of your wireless service to Verizon Wireless or other carrier of your choice. The reason for this transaction is that, after thorough evaluation of our market and operations, we have determined that our customers are best served by other wireless offerings in the market. Also, this transaction will allow us to focus on our best-in-class Fioptics video and high-speed Internet services.
What does this announcement mean to me as a Cincinnati Bell Wireless customer?
It's important to understand that nothing changes immediately. Cincinnati Bell expects to continue operating its wireless network for the next 8-12 months. Once the agreement is approved and closed, we will notify you and assist you with transition of your wireless service to Verizon Wireless or other carrier of your choice. Of course, we will waive any applicable contract termination fees at that time.
Do I need to do anything now?
There is nothing that you need to do at this time. Once the agreement is approved and closed, we will waive all applicable termination fees, provide handset unlock codes and assist you with the transition of your wireless service to Verizon Wireless or other carrier of your choice.
Does this mean I will become a Verizon Wireless customer?
It is important to understand that nothing changes immediately. Once the agreement is approved and closed, we will notify you with further details on your wireless service.
I am under contract. What about my early termination fee?
All terms and conditions of your contract with Cincinnati Bell will remain in effect while the transaction is under regulatory review. Once the agreement is approved and closed, we will waive all applicable termination fees, provide handset unlock codes and assist you with the transition of your wireless service to Verizon Wireless or other carrier of your choice.
I just bought my phone. What are my options?
You may return your phone within 14 days of the original purchase date of the handset. However, Cincinnati Bell devices will work on the Cincinnati Bell Wireless network until sometime in the first quarter of 2015. Once the agreement is approved and closed, we will waive all applicable termination fees, provide handset unlock codes and assist you with the transition of your wireless service to Verizon Wireless or other carrier of your choice.
Why won't you waive these fees and unlock my phone now?
Cincinnati Bell will not waive termination fees and unlock devices at this time. While the transaction with Verizon Wireless is under regulatory review Cincinnati Bell Wireless will continue to operate business as usual. Once the agreement is approved and closed, we will waive all applicable termination fees and assist in providing handset unlock codes to customers at that time.
Can I keep my wireless number?
Yes. After the transaction is finalized, you can port your number to another carrier.
Do I still have the option to upgrade my phone with Cincinnati Bell?
Yes. You will be able to upgrade your phone until further notice.
What do these changes mean to my handset insurance & warranty programs for both devices & accessories?
Until the transaction with Verizon Wireless closes, handset insurance and warranty programs for devices and accessories will be honored.
Can I still use my Cell-Fi unit?
You will still be able to use your Cell-Fi unit until you switch your service to another provider. Once you switch your service to another provider, you may turn in your Cell-Fi unit at any Cincinnati Bell retail store. Cell-Fi units only work on the Cincinnati Bell Wireless network.
Can I continue to visit a Cincinnati Bell store for service?
Yes! Cincinnati Bell will continue to operate its stores at this time to assist you with your communication and entertainment needs.
Will there be any interruption in my wireless service?
No. It is important to understand that nothing changes immediately. There will be no changes or interruptions in your wireless services until sometime during the first quarter of 2015.
Are there any changes to my bill statement or how I make my payments?
There are no changes to your bill statement or your bill due date at this time. Please continue to make payments to Cincinnati Bell as you do today.
I have i-wireless. Will I be refunded for the balance that I have on my account?
No. If you do not use your balance prior to Cincinnati Bell discontinuing wireless service, sometime in the first quarter of 2015, you will lose any remaining balance on your account.
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