WSJ: AT&T, T-Mobile Mull Bids For Verizon Wireless Spectrum

(RTTNews) - Telecommunications giant AT&T Inc. (T) and smaller rival T-Mobile U.S. Inc. (TMUS) are considering making bids for a block of spectrum licenses held by Verizon Wireless, the Wall Street Journal reported Wednesday, citing people familiar with the matter.

According to the WSJ report, Verizon Wireless, a joint venture of Verizon Communications Inc. (VZ) and Vodafone PLC (VOD, VOD.L), had previously tried to sell the airwaves, and said recently that it remains open to a deal.

In September, Verizon Communications agreed to buy Vodafone's 45 percent stake in their Verizon Wireless joint venture in a $130 billion cash and stock deal that will give it full control of the largest and most profitable U.S. mobile phone carrier. The deal, which remains subject to customary closing conditions, including the approval of both companies' shareholders, is still expected to close in the first quarter of 2014.

Verizon had reportedly said it would try to sell the A-block spectrum, when it was seeking regulatory approval last year for a $3.9 billion deal to buy a different piece of spectrum from a group of cable companies.

Although Verizon did not reach a deal for the A-block at that time, it sold adjacent airwaves in the so-called B-block to AT&T for $1.9 billion as part of that process. The 700 MHz B block spectrum licenses covers 42 million people in 18 states and added to AT&T's 4G LTE network.

The WSJ reported that A block of airwaves, in the lower 700 megahertz frequency, is highly valued for its ability to carry signals for long distances and penetrate buildings. The Verizon spectrum is in the "A" block is in the lower 700 megahertz frequency. Verizon and AT&T own roughly 75 percent of the low-band spectrum currently in use by wireless carriers.

AT&T, like other carriers, is seeking spectrum to carry growing data traffic and the Verizon airwaves fit well with its current holdings.

In mid-July, AT&T said it agreed to acquire prepaid-wireless provider Leap Wireless International Inc. (LEAP) for about $1.19 billion in cash, in line with its strategy to grow and expand in the low-cost wireless market. At that time, AT&T said it intended to put Leap's unutilized spectrum - covering 41 million people - to expand its 4G LTE deployment and improved its network.

Meanwhile,T-Mobile needs the low-band spectrum to bolster its network that runs primarily on higher frequencies.

T closed Wednesday's regular trading session at $34.60, down $0.14 or 0.40 percent on a volume of 27.22 million shares. In after-hours, the stock further declined $0.03 or 0.09 percent to $34.57.

TMUS closed Wednesday's trading a $26.92, down $0.06 or 0.22 percent on a volume of 4.42 million shares.