Verizon, T-Mobile Want to Trade Spectrum
Deal is designed to help each expand their LTE capacity
By John Eggerton -- Broadcasting & Cable, 6/25/2012 9:44:49 AM
The deal is designed to help each expand their LTE capacity, according to Verizon.
Verizon will give up more spectrum than it gets, to T-Mobile will also being putting cash in the deal. Terms were not disclosed.
The FCC is currently in day 137 of its informal 180-day shot clock on Verizon's proposed $3.9 billion purchase spectrum from SpectrumCo--Comcast, Time Warner Cable, Bright House, and former SpectrumCo partner, Cox.
"The agreement with T-Mobile is further evidence of the importance of a secondary spectrum market to give companies the flexibility to exchange or acquire spectrum to meet customers' growing demands for wireless data services," said Dan Mead, president of Verizon Wireless, in a statement. "The AWS licenses we'll acquire from T-Mobile and through SpectrumCo, Cox and Leap will be used to add capacity to our 4G LTE network."
BernsteinResearch analyst Craig Moffett predicts the Verizon/T-Mobile announcement will help secure FCC approval for the deal.
In a note to clients Monday, he pegged T-Mobile's cash payment at no more than $260 million and said the deal means T-Mobile would be getting spectrum covering about 60 million people, and Verizon about 22 million, but boosting contiguous holdings for both.
"As a result of this transaction, T-Mobile USA will gain AWS spectrum in many regions of the Northeast where it has historically had a weak portfolio, and give up small portions of spectrum in California where it has ample spectrum holdings," he said.
In addition to clearing a path for rapid approval of SpectrumCo, says Moffett, the deal, if approved, could also signal that the FCC is laying the groundwork for a 100 mHZ spectrum cap per market, creating "more plural" ownership of spectrum going forward.
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