WAKE FOREST,Sprint’s merger with Nextel has hit another legal roadblock just as it cleared regulatory reviews from the FCC and the Justice Department.

AirGate PCS, which is part of Lubbock, TX-based Alamosa Holdings, filed suit Monday to block the Sprint-Nextel merger. AirGate is Sprint’s largest affiliate.

The suit was filed Monday in Delaware.

Part of AirGates’ holdings are in the Southeast.

The spinoff of Sprint’s local phone division, which has a large operation in the Carolinas based in Wake Forest, is contingent on the merger. Sprint and Nextel had expected the merger to close within the next few weeks.

In a statement, Alamosa said that “following the completion of the pending merger between Sprint and Nextel, Sprint will breach the exclusivity covenants contained in the agreements governing its relationship with AirGate”. Alamosa also said “Nextel unlawfully interfered with AirGate’s exclusive rights under such agreements.”

AirGate is seeking an injunction to block Sprint and Nextel “from taking any action or entering into any agreement that would violate the exclusivity covenants contained in the agreements, a declaratory judgment declaring the rights, remedies and obligations of the parties under the agreements, and damages,” the company added.

Sprint and Nextel have won shareholder and government approval for the plan. Sprint and Nextel are moving to settle other legal challenges against the merger from affiliates.

“Neither Sprint nor Nextel should be allowed to breach previous agreements in pursuit of their goals,” said David Sharbutt, chairman and chief executive officer of Alamosa. “Sprint agreed that AirGate and Alamosa would be the exclusive providers of wireless services in their territories and that they would be entitled to specific performance of their agreements with Sprint, and we expect Sprint to fulfill its contractual commitments to AirGate and Alamosa.”

In its statement, Alamosa said it “has the exclusive right to provide digital wireless mobile communications network services under the Sprint brand name” in its territory in Nord and South Carolina, Georgia, and other states including: Texas, New Mexico, Oklahoma, Arizona, Colorado, Utah, Wisconsin, Minnesota, Missouri, Washington, Oregon, Arkansas, Kansas, Illinois, California and Tennessee.

For the complete statement from Alamosa, see: phx.corporate-ir.net/phoenix.zhtml?c=113519&p=irol-newsArticle&ID=740700&highlight=