In the latest announcement from T-Mobile, the company has announced that they have signed an agreement with Verizon Wireless to purchase certain 700 MHz A-Block spectrum licenses for $2.365 billion. Additionally T-Mobile would transfer certain AWS and PCS spectrum licenses to Verizon, which are valued close to $950 million. This brings the total valuation of this spectrum block close to $3 billion. These transactions boost T-Mobile's spectrum holdings, especially in the important low-band spectrum range, which is beneficial for the telecom major for their 4G LTE rollouts. AT&T and T-Mobile had both been vying for this spectrum band, however in the end, the deal fell to T-Mobile.
On the conclusion of this purchase, T-Mobile now holds low-band spectrum in 9 out of the top 10 and 21 out of top 30 markets across the United States. T-Mobile intends to improve network experience for end-users, in which endeavor low-band spectrum is most useful; especially since low-band spectrum provides substantially improved in-building coverage as well as performs better for rural coverage as it covers more ground as well. Telecom operators on lower band spectrum (especially 700 MHz to 900 MHz) enjoy benefits of having to roll out less sites and invest less in infrastructure for the same quality of service than those on the 1800 MHz (and higher) spectrum bands.
John Legere, President and CEO T-Mobile had this to say – "This is a great opportunity to secure low-band spectrum in many of the top markets in America. These transactions represent our biggest move yet in a series of initiatives that are rapidly expanding our already lightning fast network 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 had launched a nation-wide 4G LTE network last year, which approximately covers 209 million people in 273 metro areas. Speculations about this deal notwithstanding, the agreements have been signed off between the two telecom majors, a major milestone still remains – approval by the Federal Communications Commission (FCC) and the Department of Justice. Once these approvals are received, the deal will be closed sometime in mid-2014.
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