FCC approves AT&T's AWS spectrum transfer to T-Mobile

The FCC approved AT&T's (NYSE:T) transfer of some of its AWS spectrum to T-Mobile USA, clearing the way for T-Mobile to begin refarming its spectrum as it prepares to launch LTE services next year.

The spectrum transfer is a condition of the $6 billion breakup fee AT&T will pay to T-Mobile parent Deutsche Telekom, stemming from AT&T's failed $39 billion takeover of T-Mobile. The two companies filed for the transfer in late January.

"We applaud the FCC for acting swiftly to approve the transfer of these spectrum licenses," T-Mobile CTO Neville Ray said in a statement. "Securing this additional spectrum was a key catalyst for our plans to launch LTE in 2013 and is therefore good news for our customers."

As part of the breakup fee, T-Mobile scored AWS spectrum from AT&T in 128 market areas, including in 12 of the top 20 markets in the United States: Atlanta, Boston, Baltimore, Dallas, Denver, Houston, Los Angeles, Phoenix, San Diego, San Francisco, Seattle and Washington, D.C. T-Mobile plans to use the new AWS spectrum for its LTE deployment in 2013. Currently, T-Mobile offers an HSPA+42 network covering 184 million POPs in 175 markets, and its HSPA+21 network covers around 215 million POPs. The breakup fee includes $3 billion in cash, as well as a seven-year UMTS roaming agreements that will allow T-Mobile to expand its coverage to 280 million POPs from 230 million today.

T-Mobile parent Deutsche Telekom will invest $1.4 billion in T-Mobile's network this year and in 2013 to pay for the network upgrades, with investments totaling $4 billion over time. T-Mobile has said it will have enough AWS spectrum in 75 percent of the top 25 markets to roll out LTE with 10 MHz of spectrum.

As part of the network upgrade, T-Mobile will install new equipment in 37,000 cell sites and will deploy HSPA+ in its PCS 1900 MHz spectrum band, which it is currently using for 2G GSM services (the carrier's HSPA+ network currently runs on T-Mobile's 1700 MHz AWS spectrum). The company said it will continue to support 2G customers as it refarms the spectrum.

T-Mobile recently welcomed the news that AT&T has started unlocking the Apple (NASDAQ:AAPL) iPhones of its non-contract customers, and said later this year it will begin offering HSPA+ support for the devices on its network. Currently, customers who bring unlocked iPhones to T-Mobile can only get 2G EDGE data speeds, since the iPhone does not support T-Mobile's 1700 MHz AWS spectrum.

For more:
- see this T-Mobile post
- see this Reuters article
- see this PC Magazine article

Related Articles:
Study: AT&T, T-Mobile top network speed tests
T-Mobile to give unlocked iPhones HSPA+ speeds this year
T-Mobile, Leap agree to swap AWS spectrum
Unlocked iPhones from AT&T may benefit FreedomPop and H2O
T-Mobile to launch LTE in 2013 in AWS spectrum divested from AT&T
AT&T, T-Mobile file request for AWS spectrum transfer

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