Sprint pays $1.3bn to buy partner

US Unwired has more than 500,000 customers in nine US states

US mobile group Sprint is to buy its affiliate US Unwired for around $1.3bn (£793m) in a deal that will end a series of legal rows between the two.

Under the deal, Sprint will also assume US Unwired's debt - which stood at $233m at the end of March.

Meanwhile, Unwired will end its legal actions against Sprint, including a bid to end Sprint's tie-up with Nextel.

The Sprint-Nextel deal will create the third largest mobile phone operator in the US drawing in revenues of $40bn.

With 35 million subscribers, the combined group will be in a strong position to take on market leaders Cingular and Verizon, analysts have said.

Legal worries

Sprint's decision to buy Unwired is a timely one as Unwired's request for an injunction to halt the Sprint-Nextel deal was due to be held on 15 July.

However, analysts have warned that the move could trigger further action from other Sprint partners.

"It sends a message to other affiliates. And the message is that lawsuits work," Todd Rethemeier, an analyst at SurTerre Research, told Reuters news agency.

Mr Rethmeier also suggested Sprint's associates may use legal action to push for better contracts or even takeovers.

Sprint has been in talks with its affiliates since it announced its deal with Nextel in December, a spokesman for the firm said. Talks with its nine remaining partners were continuing.