Verizon Wireless (NYSE:VZ) agreed to sell a huge chunk of its Lower 700 MHz B Block spectrum to AT&T Mobility (NYSE:T) for $1.9 billion. The deal, which essentially passes spectrum Verizon won at auction in 2008 to its largest competitor in exchange for money and other airwaves, is sure to raise the hackles of those in the industry who think Verizon and AT&T control too much spectrum already.
Under the deal, Verizon will sell 39 lower 700 MHz B Block licenses to AT&T in exchange for a payment of $1.9 billion and the transfer by AT&T to Verizon of 10 MHz AWS licenses in certain western markets, including Los Angeles, Phoenix, Fresno, Calif., and Portland, Ore.
The FCC and Department of Justice need to approve the deal. AT&T said it anticipates closing the deal sometime in the second half of 2013.
The 700 MHz licenses AT&T is getting from Verizon cover more than 42 million people in 18 states--California, Colorado, Florida, Idaho, Illinois, Louisiana, Montana, New Mexico, New York, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.
In conjunction with the AT&T deal, Verizon said it will sell lower 700 MHz B Block licenses covering the Charlotte, Greensboro and Raleigh-Durham markets in North Carolina to Grain Management, a private equity firm that invests in the telecommunications sector, for $189 million. Verizon will lease from Grain Management an AWS license covering Dallas, Texas, which Grain is acquiring from AT&T.
Verizon agreed to sell its Lower 700 MHz A and B Block spectrum if the FCC approved its $3.9 billion purchase of nationwide AWS spectrum from a group of cable companies, including Comcast, Time Warner Cable, Bright House Networks and Cox Communications. The FCC approved the deal in August. Verizon spent a total of $9.36 billion on its 700 MHz spectrum during the FCC's 2008 auction, with around $4.4 billion of that going to A and B Block licenses.
Verizon said it has reached agreements to sell all of its 700 MHz A and B Block licenses.
AT&T joins U.S. Cellular (NYSE:USM), Colorado Valley Communications, Clear Talk, Panhandle Telecommunication Systems and Nortex Communications in buying Verizon's 700 MHz spectrum.
Verizon is using its 700 MHz Upper C Block spectrum for its initial LTE deployment, and now covers 273.5 million POPs with LTE, or roughly 89 percent of the U.S. population. Verizon expects to finish its initial LTE deployment by mid-year. Verizon plans to begin turning on LTE services in its AWS spectrum this year in locations where it needs extra capacity.
Meanwhile, AT&T currently covers 174 million POPs with LTE, and plans to hit at least 250 million POPs by the end of 2013. AT&T revealed late last year it would increase its LTE coverage to 300 million POPs by the end of 2014.
- see this Verizon release
- see this AT&T release
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