AT&T, U.S. Cellular buying 700 MHz licenses for LTE
In separate transactions, AT&T Mobility (NYSE:T) and U.S. Cellular are looking to purchase 700 MHz licenses, mainly from Cox Communications. Terms of the deals were not disclosed.
Pending FCC approval, AT&T is hoping to buy eight Lower 700 MHz B Block licenses from Cox covering areas on the East Coast, including cities in Florida and Virginia. Cox paid around $28 million for the licenses during the FCC's 700 MHz spectrum auction in 2008. An AT&T spokesman declined to say how much the carrier paid for the spectrum.
"The entire industry is focused in ensuring there is enough spectrum to meet surging customer demand for mobile Internet users," wrote AT&T spokesman Steven Schwadron in an email to FierceWireless. "AT&T's purchase of the 700 MHz licenses will support our continued deployment of 4G LTE services and is consistent with our strategy to pursue additional spectrum to support a great mobile Internet and voice experience for our customers."
Separately, U.S. Cellular purchased four Lower 700 MHz A Block licenses from Cox covering mainly locations in Kansas. Cox paid around $30 million for the licenses during the FCC's 2008 auction.
"USCC plans to use the acquired spectrum to develop its ‘fourth generation' LTE facilities," U.S. Cellular said in its FCC filing. A U.S. Cellular representative declined to answer further questions on the topic.
Finally, in another separate transaction, AT&T purchased four Lower 700 MHz C Block licenses from Peoples Telephone Cooperative covering locations mainly in Texas. AT&T said it would use the spectrum for its LTE services.
The spectrum transactions, taken together, reflect a number of notable trends in the U.S. wireless industry. First, they represent AT&T and U.S. Cellular's continuing spectrum needs. Both carriers are building out LTE networks and both have said they will need additional radio waves to meet demand.
Indeed, U.S. Cellular has said it would be interested in purchasing the 700 MHz Lower A and B Block spectrum Verizon Wireless (NYSE:VZ) has said it would sell if the FCC approves its purchase of spectrum from cable companies. (In December, Verizon agreed to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. That transaction is still awaiting FCC approval.)
Second, the spectrum deals represent the further withdrawal of Cox from the wireless market. The company purchased AWS and 700 MHz spectrum licenses covering much of its wired footprint and had begun constructing a wireless network, but ultimately gave up that effort and has been selling off its spectrum licenses since. In December, Verizon said it would buy Cox's 20 MHz of AWS spectrum covering 28 million POPs for $315 million.
Article updated May 16 with comments from AT&T.