updated 10:25 am EDT, Mon June 25, 2012
Deal awaits regulatory approval
Despite the vocal dispute between Verizon and T-Mobile regarding spectrum ownership, both companies have established a swap and sale agreement for Advanced Wireless Services-band (AWS) licenses in several hundred US markets. The companies suggest the spectrum transfer will help bolster their respective LTE expansion plans.
Although the agreement includes several spectrum swaps to optimize AWS usage in specific markets, the overall deal represents a net transfer of Verizon spectrum to T-Mobile.
“This agreement will provide T-Mobile with critical AWS spectrum, enhancing both network capacity and performance and allowing us to meet the growing consumer demand for 4G mobile broadband,” said T-Mobile CEO Phillip Humm.
The deal primarily focuses on AWS spectrum that Verizon does not yet own, but is in the process of purchasing from SpectrumCo, Cox and Leap. Interestingly, T-Mobile just months ago called on the FCC to block Verizon's AWS purchase. Verizon and several cable companies accused T-Mobile of hypocrisy, citing the failed AT&T buyout that nevertheless resulted in an AWS transfer to the smaller competitor. Humm had publicly dismissed the possibility of buying part of Verizon's C-block spectrum to address the anticompetitive concerns.
T-Mobile suggests it will benefit through 4G rollout in the majority of the top 25 US markets, including Philadelphia, PA; Washington, DC; Detroit, MI; Minneapolis, MN; Seattle, WA; Cleveland and Columbus, OH; Milwaukee, WI; Charlotte, NC; Raleigh-Durham, NC; Greensboro, NC; Memphis, TN; and Rochester, NY.
The companies have declined to disclose the value of the spectrum transfer. It remain unclear if the deal will pass FCC scrutiny, though the swap presumably addresses many of T-Mobile's AWS ownership concerns.