T-Mobile Buys Spectrum From Verizon Wireless For $2.4 Bln

(RTTNews) - T-Mobile US, Inc. (TMUS) has agreed to purchase spectrum licenses from Verizon Wireless for $2.365 billion in cash and the transfer of certain AWS and PCS spectrum licenses valued at $950 million.

For T-Mobile, the deal for 700-megahertz A-block spectrum licenses means having low-band spectrum in 9 of the top 10 and 21 of the top 30 markets across the U.S.

Low-band spectrum substantially improves in-building coverage and coverage in rural areas. It also travels greater distances than high-band spectrum and is thus a more efficient way to provide coverage at the edge of cities and in less densely populated areas.

These transactions are expected to close in mid-2014.

John Legere, President and CEO of T-Mobile, said, "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."

Combined with its existing Boston A-Block holdings, T-Mobile will have low-band spectrum covering about 158 million people, including New York, Los Angeles, Dallas, Houston, Philadelphia, Atlanta, Washington D.C., and Detroit.

T-Mobile expects to roll out service and compatible handsets on this A-Block spectrum as early as the fourth quarter of 2014.

In 2013, T-Mobile deployed 10+10 MHz 4G LTE in 43 of the top 50 metro areas. The firm 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 around 209 million people in 273 metro areas.

Also, as part of the deal, the two companies will realign spectrum blocks in some markets, primarily in northern California and the Atlanta area.

The agreements are subject to approval by the Federal Communications Commission and the Department of Justice, as well as other customary closing conditions.

The Wall Street Journal had reported last week that AT&T Inc. (T) was also making a bids for the block of spectrum licenses held by Verizon Wireless.

TMUS fell 3.3 percent on Friday to settle at $32.28.