Monday, June 25, 2012

(BN) Verizon, T-Mobile USA Agree to Spectrum Swap Pending Cable Deal

June 25 (Bloomberg) -- Verizon Wireless, the largest U.S. wireless carrier, agreed to sell airwave licenses to T-Mobile USA Inc., contingent on Verizon completing a $3.6 billion acquisition of spectrum from cable companies.

The exchange will allow Verizon to sell T-Mobile some of the surplus spectrum it will have in certain cities as a result of the SpectrumCo deal, which was proposed by Verizon Wireless in December. SpectrumCo is a joint venture of cable companies led by Comcast Corp., which forged the accord as part of a plan to jointly market services with Verizon.

The T-Mobile agreement is the second move by Verizon to sell spectrum contingent on the approval of the SpectrumCo purchase. T-Mobile will pay an undisclosed amount for Verizon's advanced wireless services, or AWS, spectrum, which could be used to improve coverage and features. The plan involves "spectrum swaps that will result in better use of the AWS band for both companies," according to a statement.

"This is a proactive move by Verizon to improve its position with regulators," Jennifer Fritzsche, an analyst with Wells Fargo, said today in a note.

The Federal Communications Commission is reviewing Verizon's offer to buy SpectrumCo's airwaves, which are currently not being used. Neil Grace, a spokesman for the FCC, declined to comment.

In an effort to help ease the FCC approval and avoid the appearance that it is hoarding spectrum, Verizon Wireless said on April 18 that it would conduct a sale of its 700 megahertz A and B spectrum, contingent on the closing of its SpectrumCo deal.

Deutsche Telekom AG, the parent of T-Mobile USA, plans to boost U.S. network spending by $1.4 billion over two years in a race to upgrade equipment and bring faster connections to smartphones.

1 comment:

Prisur said...

Isn't going to have an issue with this since they blocked AT&T/T-Mobile deal recently - Thanks, GSM Module