The details of T-Mobile US' (NYSE:TMUS) $50 million expansion into 700 MHz spectrum continue to become clearer as FCC documents revealed the carrier purchased 700 MHz A Block licenses from Actel, a wholly-owned subsidiary of wireline telco CenturyLink.
T-Mobile revealed the deal in a filing with the FCC in which it asked to gain control of the spectrum licenses. The companies did not reveal financial terms of the deal.
According to the filing, the 13 spectrum licenses T-Mobile wants to buy from Actel include markets in parts of Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Michigan, Missouri, Montana, New Mexico and Oklahoma. Most of the markets covered are small cites, with Little Rock, Ark., being perhaps the largest. T-Mobile spokeswoman Stephenie Hanschka confirmed to FierceWireless that the deal covers 6.5 million POPs.
As it did in a recent filing to acquire 700 MHz A Block spectrum from I-700 A Block LLC for licenses in the Evansville-Henderson area in Indiana and Kentucky and the Paducah area in Kentucky, T-Mobile said the deal will yield clear public interest benefits" by allowing T-Mobile to expand its 700 MHz footprint "and thus offer improved services to its customers."
Further, T-Mobile noted that there "will be no loss of an existing service provider in any of the market areas subject to the transaction at issue" and that Actel is not using the spectrum "to provide service to end-user customers."
T-Mobile paid a total of $50.5 million for its recent A-Block purchases. The I-700 deal covered 1.1 million POPs, according to Hanschka. "We have recently entered into agreements to acquire A-Block spectrum in additional markets for multiple parties covering 8.7 million POPs for approximately $50.5 million," T-Mobile CEO John Legere said last week during the company's second-quarter earnings conference call, according to a Seeking Alpha transcript. "That translates into an average MHz-per-POP price of approximately $0.48 compared to $1.85 per MHz-POP price we pay in the Verizon A-Block transaction."
Between its two deals with Actel and I-700, T-Mobile is buying spectrum covering 7.6 million POPs, leaving just 900,000 POPs remaining to be covered in any other deals that may soon come to light.
The general value of 700 MHz A Block spectrum scored a boost last year when AT&T Mobility (NYSE: T) said it would support 700 MHz interoperability by adding A Block, Band 12-capable devices to its portfolio. The move essentially will help lower the cost of A Block devices by broadening the number of carriers using the band.
In April, T-Mobile completed its $2.4 billion deal to buy Verizon Wireless' (NYSE: VZ) MHz A Block spectrum but has been on the hunt for more. T-Mobile said last week it will start rolling out is 700 MHz A Block spectrum it acquired from Verizon beginning in the third quarter. The spectrum covers 150 million POPs, including nine of the top 10 and 21 of top 30 metro areas. The company said its first 700 MHz sites are on air and its first handsets are being tested and should be in the market in the fourth quarter. T-Mobile said it has already cleared encumbered A-Block metro areas in five markets covering more than 13 million POPs on top of many markets already free and clear. The A-Block spectrum T-Mobile got from Verizon covers the markets of Atlanta, Dallas, Detroit, Houston, Los Angeles, New York City, Philadelphia and Washington, D.C.
- see this FCC filing
- see this TMoNews 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.