Verizon considers licensing LTE spectrum to rural carriers

Verizon Wireless (NYSE:VZ) is in discussions with a number of rural wireless carriers to license them its 700 MHZ LTE spectrum, in a bid to expand the reach of its LTE network.

Verizon Wireless CEO Lowell McAdam made the disclosure in an interview with the Wall Street Journal. The deals, which have not yet been finalized, would grant the carriers access to spectrum that Verizon paid close to $10 billion for in 2008 via the FCC's 700 MHz auction.

Under the proposed deals, Verizon would license the spectrum to the local carriers, for a small fee; the local carrier would then sell the service. Either Verizon or the other carrier would be responsible for the network equipment. Verizon is also looking to strike data roaming deals with the carriers.   

The nation's No. 1 carrier plans to launch 25-30 commercial LTE markets in the fourth quarter, covering 100 million POPs. The carrier has said it plans to have LTE deployed across its 3G footprint by the end of 2013. "These rural markets would take us a while to get to," McAdam said. He said Verizon doesn't expect to make a lot of money on the deals, but that the goal would be to more quickly expand its LTE footprint.

McAdam did not disclose how many carriers the company is in talks with or when the deals might be reached. A Verizon spokesman did not immediately respond to a request for comment.

The disclosure comes as the FCC is considering whether to make mobile data roaming mandatory. The FCC praised Verizon's announcement though.

"Bringing the benefits of mobile broadband to rural America is one the commission's top priorities," FCC Chairman Julius Genachowski and Commissioner Meredith Attwell-Baker said in a joint statement. "The news of Verizon Wireless' plan to partner with rural providers to accelerate investment in 4G networks is very encouraging. Seamless universal connectivity is essential to economic growth and world-class technology leadership. We look forward to learning more about Verizon Wireless' initiative, its successful implementation and other examples of industry-led innovation."

For more:
- see this WSJ article (sub. req.)

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