Ntelos pulls out of Richmond and Hampton Roads

Waynesboro-based Ntelos is starting the new year with a new focus. The telecommunications company announced in December that it plans to pull out of its eastern market (including the Richmond and Hampton Roads areas) to concentrate instead on customers in the western part of the commonwealth and in West Virginia.

Ntelos provides wireless voice and data services to 457,200 retail subscribers, 59 percent of which are in its western market. A majority of its cell sites (69 percent) also are in the western market. 

“It was something we clearly deliberated over and looked at pretty intensely,” says Rod Dir, the president and chief operating officer of Ntelos.

One issue driving the decision, he says, was the fact that Ntelos didn’t have enough wireless spectrum in its eastern market to build out its 4G Long-Term Evolution (LTE) network. In the western market, however, it has double the amount of spectrum (about 40 megahertz as opposed to 20).

During the next two to three years, the company plans to invest $200 million expanding its 4G LTE network in the western market, Dir says.

“Although the big carriers are making similar investments, I don’t think they’ve got the same level of commitment as Ntelos will have in these markets,” Dir says, adding he hopes that commitment will be a differentiating factor for the company.

Dir, who has been an Ntelos director since 2011, became the company’s leader last summer when CEO Jim Hyde resigned “to pursue other career opportunities,” according to Ntelos spokesman Mike Minnis. Dir plans to be a candidate for the top job, but he is focusing on getting the company through its transition period while the board of directors conducts its CEO search.

Minnis points out that that the company’s refocus will allow Ntelos to re-establish itself as the wireless leader in underserved markets. In addition to the expansion of its 4G LTE network, Ntelos says it will soon allow customers to connect to its wireless network through tablet devices. The company also has teamed up with Dish Network on a pilot project offering high-speed Internet to rural areas of Virginia.

Ntelos plans to sell its wireless licenses in its eastern market to T-Mobile for $56 million in cash. That transaction, which must be approved by the Federal Communications Commission, is expected to close in April.

Ntelos also says it will wind down its eastern market network and retail operations this year as it transitions subscribers to another carrier. The company intends to end operations in the area completely by November.

Because of the transition, 17 eastern market stores have closed, and 120 jobs have been eliminated, but Dir says some displaced employees will have the chance to continue working for Ntelos. 

In a December news release announcing the company’s transition, Ntelos said  it expected to have adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $128 million to $132 million for 2014. For 2015, the company anticipates adjusted EBITDA of $100 million to $108 million.