Verizon Wireless announced an agreement with T-Mobile USA to exchange certain frequencies in the AWS (Advanced Wireless Services) band. Under the agreement, both companies will receive additional spectrum depth in specific markets to meet LTE capacity needs and expansion.
T-Mobile said it will gain spectrum covering 60 million people, notably in Philadelphia; Washington, DC; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; Charlotte, Raleigh-Durham and Greensboro, North Carolina; Memphis, Tennessee; and Rochester, New York. In exchange it will give Verizon spectrum covering 22 million people and a cash payment. The agreement also includes exchanges within a number of markets, where the companies will swap licenses to create more contiguous blocks of spectrum and re-align spectrum in adjacent markets.
The agreement will see Verizon swap some of the frequencies it's acquiring from cable operators and Leap Wireless, so the T-Mobile deal depends on these other transactions closing first. The acquisition of the cable operators' spectrum was first announced in late 2011 and is still awaiting regulatory approval. The agreement with T-Mobile will mean a net loss of frequencies for Verizon. This suggests the deal may be part of Verizon's attempts to secure regulatory approval for the cable transactions, which have faced opposition from consumer groups concerned about Verizon's market dominance. Financial terms of the T-Mobile agreement were not disclosed. The license transfers will also require FCC approval, which is expected later this summer.
