T-Mobile USA and Leap Wireless (NASDAQ:LEAP) agreed to swap AWS spectrum in several markets across the country to boost capacity, which Leap said will help it improve its LTE capacity as it deploys the technology.
Click here for details on T-Mobile refarming plan.
The deals also involve Leap's noncontrolled, majority-owned venture, Savary Island Wireless, as well as T-Mobile's joint venture with Cook Inlet. Financial terms of the deals were not disclosed. The FCC will need to approve the swaps; T-Mobile said ht eocmpanies filed an applicaiton with the FCC for the ransfer on April 4.
Under the swap, Leap will get 10 MHz of additional AWS spectrum in Phoenix, and Houston, Galveston and Bryan-College Station, Texas. Leap and Savary will give T-Mobile spectrum in various markets in Alabama, Illinois, Missouri, Minnesota and Wisconsin. The transactions also include intra-market exchanges among Leap, T-Mobile and Cook Inlet in Philadelphia, Wilmington, Atlantic City and various markets in Texas and New Mexico, and between Leap and Cook Inlet in certain markets in Texas.
"These transactions will enhance our spectrum depth in these markets and provide us longer term flexibility to offer a larger LTE channel. As we have previously announced, we plan to cover approximately two-thirds of our current network footprint with LTE technology over the next two to three years," Leap CEO Doug Hutcheson. "In addition the transactions will allow us to re-align spectrum in key markets into contiguous channels thereby optimizing our delivery of wireless services."
Leap has launched LTE service in Tucson, Ariz., and has said it will cover 25 million people with LTE by the end of 2012. Interestingly, the company has said it expects to eventually reach an LTE deployment covering 5x5 MHz channels, though it might introduce narrower channels initially.
T-Mobile plans to launch LTE service in 2013 in 75 percent of the top 25 markets using AWS spectrum that it expects to receive as part of the $6 billion breakup fee from AT&T's (NYSE:T) failed acquisition of T-Mobile. In addition, it will deploy HSPA+ in its PCS 1900 MHz spectrum band, which it is currently using for 2G GSM services (the carrier's HSPA+ network runs on T-Mobile's 1700 MHz AWS spectrum). T-Mobile parent Deutsche Telekom will invest $1.4 billion in T-Mobile's network this year and in 2013 to pay for the upgrades, with investments totaling $4 billion over time. T-Mobile said in a statement that the swap will allow it "to enhance the 4G user experience as we continue to deliver a fast, nationwide 4G network and modernize our network for LTE services."
In an FCC filing opposing Verizon Wireless' (NYSE:VZ) proposed $3.9 billion acquisition of AWS spectrum from a group of cable companies, T-Mobile detailed how it plans to refarm its spectrum holdings. By mid-2013, T-Mobile expects half of its 1900 MHz spectrum to be devoted to GSM while the other half will run HSPA+ services, and that by then half of its AWS spectrum will support HSPA+ and the other half LTE. The carrier did not detail when it would reach the "final state" of its spectrum refarming, but indicated that by then the vast majority of its 1900 MHz spectrum will be used for HSPA+ while its 1700 MHz spectrum will be used for LTE.
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Article updated April 9 with more information from T-Mobile.