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T-Mobile Buys Verizon Spectrum in $3.3B Deal
T-Mobile Buys Verizon Spectrum in $3.3B Deal
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JANUARY
06
2014

Even while rumors spin about Sprint snapping up T-Mobile, the nation’s fourth-largest wireless carrier continues to push toward its goals.

The company just announced it has inked deals to acquire certain 700 MHz A-Block spectrum licenses from Verizon Wireless for $2.365 billion in cash, as well as the transfer of certain Relevant Products/Services and PCS spectrum licenses, which have an aggregate estimated value of approximately $950 million.

The end result: combined with T-Mobile’s existing A-Block holdings in Boston, the transactions mean the company now has what it calls “important” low-band spectrum in nine of the top 10 and 21 of the top 30 markets across the United States.

The Value of Low-Band Spectrum

“This is a great opportunity to secure low-band spectrum in many of the top markets in America,” said John Legere, president and CEO of T-Mobile. “These transactions represent our biggest move yet in a series of initiatives that are rapidly expanding our already lightning fast Relevant Products/Services and improving its performance across the country. We will continue to find ways to advance our customers’ network experience just as our bold un-carrier moves have shaken up the wireless industry to benefit consumers.”

T-Mobile is pushing that message hard, calling the deals “significant transactions” that will further enhance the network experience that T-Mobile expects will create shareholder value. Here’s why: Low-band spectrum substantially improves in-building coverage as well as coverage in rural areas. It also travels greater distances than high-band spectrum and therefore is a more efficient way to provide coverage at the edge of cities and in less densely populated areas.

Combined with its existing Boston A-Block holdings, T-Mobile said it will have low-band spectrum covering approximately 158 million people -- including New York, Los Angeles, Dallas, Houston, Philadelphia, Atlanta, Washington D.C., and Detroit. T-Mobile anticipates rolling out service and compatible handsets on this A-Block spectrum as soon as the fourth quarter of 2014.

A Long Way to Go

We asked Jeff Kagan, an independent technology analyst, for his thoughts on the buy. He told us this is indeed good news for T-Mobile.

“T-Mobile has worked hard during the last year to improve their image, and while their actual performance is also better it still has a long way to go to catch up to Verizon, AT&T and Sprint,” Kagan said.

“Trading and buying spectrum is a regular occurrence in the wireless industry. So this is not unusual. This will help T-Mobile provide better service to their customers in certain markets. This one step in a long journey toward recovery for T-Mobile, and it's a step in the right direction.”

In 2013, T-Mobile continued its LTE rollout, deploying 10+10 MHz 4G LTE in 43 of the top 50 metro areas and it is commencing substantive deployments of 20+20 MHz 4G LTE in 2014. The company launched its nationwide 4G LTE network in 2013, which currently covers approximately 209 million people in 273 metro areas.

Read more on: T-Mobile, Verizon, Sprint, AT&T, 4G LTE
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