Verizon Wireless (NYSE: VZ) is expanding the reach of its LTE network in California and Hawaii via new deals with two small carriers, Golden State Cellular in California and Mobi PCS in Hawaii. Under the terms of the two separate deals, which both still require FCC approval, Verizon will acquire the small carriers' spectrum.
The transactions are just the latest in a long line of moves by the nation's largest carriers to increase their network footprints and spectrum portfolios via the purchase of smaller carriers. Indeed, the number of Tier 2 and Tier 3 wireless carriers in the United States is rapidly decreasing--earlier this month, Verizon agreed to buy Cincinnati Bell's wireless spectrum in a deal valued at $210 million, ending the regional carrier's wireless operations. According to Strategy Analytics, Cincinnati Bell is the nation's ninth largest wireless carrier.
Other small wireless carriers that have exited the industry through mergers or acquisitions include Alltel, Clearwire, Centennial Wireless, Cox Communications, Dobson Communications, Leap Wireless, MetroPCS and Revol Wireless.
"In the Golden State Cellular transaction, Verizon Wireless would acquire Golden State Cellular's operations in CA RSA #3, including spectrum, network assets and customers in Amador, Alpine, Calaveras, Tuolumne and Mariposa counties," Verizon spokeswoman Robin Nicol wrote in response to questions from FierceWireless. She did not provide financial terms of the transaction.
According to a Verizon filing with the FCC, Verizon plans to transition Golden State Cellular's customers to its service plans within 15 months after the deal closes.
According to a person familiar with the transaction, Golden State Cellular operates a CDMA network and counts around 18,000 subscribers.
As for Verizon's transaction with Mobi PCS, Nicol said the carrier will acquire 20-30 MHz of PCS spectrum in the state of Hawaii. "The transaction also includes a leaseback of 10 MHz of spectrum to allow Mobi to continue to offer service to its subscribers," she noted.
In its FCC filing, Verizon noted that Mobi PCS "will lease back PCS spectrum from Verizon Wireless for up to 12 months while it makes the transition away from being a facilities-based services provider." Verizon also said that Mobi PCS "is actively exploring arrangements with other providers to provide service alternatives for its customers, including, but not limited to, an employee-led MVNO operation or transitioning subscribers to another provider."
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Article updated April 22 to clarify the nature of the transactions.