T-Mobile US (NYSE:TMUS) is looking to grab 700 MHz A Block spectrum to fill out its portfolio of low-band airwaves ahead of a potential deal with Sprint, according to a report from the New York Post.
The report, citing unnamed sources, said that T-Mobile is making offers to buy the low-band spectrum and is hungry for spectrum with strong propagation characteristics, even though T-Mobile might need to give up such spectrum if it goes ahead with a merger with Sprint. "Buying spectrum would add to the potential divestitures resulting from the combination," one source said.
T-Mobile declined to comment, according to the Post.
In April, T-Mobile completed its $2.4 billion deal to buy Verizon Wireless' (NYSE: VZ) 700 MHz A Block spectrum. T-Mobile has said the transaction, combined with its existing A Block holdings in the Boston metro area, will result in T-Mobile having low-band spectrum in nine of the top 10 and 21 of the top 30 markets across the United States. Combined with its existing Boston A Block holdings, T-Mobile said it will have low-band spectrum covering approximately 150 million POPs, including Atlanta, Dallas, Detroit, Houston, Los Angeles, New York City, Philadelphia and Washington, D.C. T-Mobile plans on deploying the 700 MHz spectrum by the end of 2014.
U.S. Cellular (NYSE:USM), C Spire Wireless, Vulcan Wireless and other smaller carriers also hold 700 MHz A Block spectrum. In 2013, T-Mobile scooped up 10 MHz of AWS spectrum from U.S. Cellular, covering a total of 32 million POPs in 29 markets in the Mississippi Valley region, including Kansas City, Louisville, Memphis, Nashville, New Orleans and St. Louis. T-Mobile uses AWS spectrum for its LTE service and plans to use its 700 MHz spectrum for LTE as well.
The secondary spectrum market has been active this year, with larger carriers generally engaging in deals with smaller ones mainly to acquire their airwaves. AT&T Mobility (NYSE: T) in May inked an agreement to purchase all of Sprint's (NYSE: S) WCS spectrum licenses. Sprint owns 19 2.3 GHz WCS licenses in locations across the South including in markets in Florida, Louisiana, Texas, Alabama, Georgia and elsewhere.
In April, Verizon sought to expand reach of its LTE network in California and Hawaii via spectrum deals with two small carriers, Golden State Cellular in California and Mobi PCS in Hawaii. Verizon is also buying Cincinnati Bell's wireless spectrum, pushing the carrier out of the wireless industry. AT&T has also continued its strategy of buying 700 MHz licenses from smaller companies to augment its network capacity.
- see this NY Post article
- see this Reuters article
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Correction, Sept. 29, 2014: This article incorrectly stated the number of covered POPs involved in T-Mobile's 700 MHz A Block purchase from Verizon. It was for 150 million covered POPs, not 158 million.