September 11, 2013
Verizon Sells Nearly $2 Billion Worth Of Spectrum To Rival AT&T
Peter Suciu for redOrbit.com - Your Universe Online
AT&T, the second largest mobile operator in the United States announced on Tuesday that it had completed the acquisition of spectrum from rival Verizon Wireless for $1.9 billion in cash. This included 39 spectrum licenses, located in the 700 MHz band, and covers 42 million people across 18 US states.
This acquisition covers spectrum in Colorado, California, Idaho, Florida, Illinois, Louisiana, Montana, New Mexico, New York, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.
AT&T will use this to strengthen its 4G LTE coverage. The conclusion of this spectrum deal comes seven months after it was first initiated between the two rival carriers. The delay between the announcement at the beginning of this year and the conclusion was due to the required approval from the Federal Communications Commission and the Department of Justice.
The FCC approved the transfers on September 3.
AT&T expects to have the 4G LTE deployment substantially completed by summer of 2014.
In addition to the sum that AT&T paid Verizon Wireless, which is currently the top carrier in the United States, the deal also saw the transfer of Advanced Wireless Services, also called AWS, spectrum to Verizon. This included 1.7/2.1 GHz AWS spectrum that covers markets in Los Angeles, Fresno, Phoenix and Portland.
Cnet noted this week that the demand for high-speed wireless access continues to grow exponentially, and that the carriers have been busy “shoring up their spectrum positions, which give them the capacity to continue delivering services without disruption or bandwidth traffic jams.”
In this case Verizon wasn’t using the 700MHz B block, which AT&T will now utilize to augment its 4G LTE deployment. This follows AT&T’s bid to buy wireless carrier T-Mobile USA for $39 billion, which was blocked by regulators in 2011.
AT&T’s 4G LTE network currently covers more than 225 million people and the company has plans to reach nearly 270 million by the end of 2013, with the goal to substantially complete the build utilizing the acquired spectrum by summer 2014.
In July AT&T acquired Leap Wireless International, a company that offers pre-paid cell service under the brand name Cricket Wireless. AT&T reportedly paid nearly double what Leap was valued at, or about $1.19 billion in cash and roughly $15 a share. At the beginning of this year the number two carrier in the United States also announced it would buy the retail operations of Atlantic Tele-Network for $780 million, largely as a way to gain its spectrum assets.
Spectrum remains a serious issue for all mobile carriers. In June T-Mobile announced that it had signed a deal to purchase spectrum from US Cellular for $308 million in cash. This deal gave the number four US carrier 10 MHz of AWS spectrum to cover a total of 32 million people in 29 markets, including St. Louis, Nashville, Kansas City, Memphis, Lexington, Little Rock, Birmingham, New Orleans, and Louisville.