25
Jun
2012-06-25_11h43_43

Verizon and T-Mobile may not regularly make headlines together, but this morning the two companies have announced that they've struck a deal to swap spectrum (and some money) to bolster both companies' LTE networks. Yes, including the one T-Mobile has yet to build. While specifics haven't been disclosed, it sounds like T-Mobile will be the big winner here, walking away with a net gain in spectrum holdings—something the company desperately needs—while paying an undisclosed amount of money to Verizon for the trouble.

The deal isn't solid yet, though. Some of the spectrum that Verizon is offering to T-Mobile technically belongs to SpectrumCo, Cox, and Leap at the moment. Verizon is in the process of purchasing spectrum from these companies and this new deal with T-Mobile depends on Verizon acquiring those holdings. The FCC and the DOJ could still block Verizon's acquisitions of those licenses, though Verizon may be selling off some of the spectrum in an attempt to persuade the feds to give it the green light.

From Verizon's press release:

“The agreement with T-Mobile is further evidence of the importance of a secondary spectrum market to give companies the flexibility to exchange or acquire spectrum to meet customers’ growing demands for wireless data services,”  said Dan Mead, president and CEO of Verizon Wireless.

"See? We're playing nice! Let us keep trading spectrum." Meanwhile, T-Mobile is taking the opportunity to talk up its 4G plans. Touting its net spectrum gain, the company says this new agreement will allow it to trade its old spectrum covering 22 million people for new spectrum covering 60 million people. T-Mobile says this is in addition to its $4bn "network evolution plan" that the company is already pursuing, subsidized by the failed AT&T acquisition.

All in all, it seems like T-Mobile is finally getting dealt some decent cards. Meanwhile, Verizon gets to improve its own already substantial LTE network while brushing off regulatory scrutiny, and everybody wins. Right?

T-Mobile Signs Spectrum Agreement With Verizon Wireless

T-Mobile to Improve Portfolio of Nationwide Broadband Spectrum

Following Regulatory Approval

Net Gain of Spectrum Will Assist Rollout of LTE in 2013

Bellevue, Wash. — June 25, 2012 — Today, T-Mobile USA, Inc. announced an agreement with Verizon Wireless for the purchase and exchange of certain Advanced Wireless Services (AWS) spectrum licenses in 218 markets across the U.S.  The transaction will improve T-Mobile’s spectrum position in 15 of the top 25 markets in the U.S. by providing an opportunity for T-Mobile both to acquire additional AWS spectrum and to realign its existing spectrum holdings.  Following regulatory approval, this spectrum can be promptly deployed to enhance the company’s 4G mobile broadband service, including the rollout of LTE service next year.Some of the spectrum T-Mobile is acquiring in this transaction include licenses that Verizon is purchasing from SpectrumCo, Cox and Leap, and the agreement is contingent on the closing of those transactions and is subject to regulatory approval by the Federal Communications Commission (FCC) and the Department of Justice.

“This agreement will provide T-Mobile with critical AWS spectrum, enhancing both network capacity and performance and allowing us to meet the growing consumer demand for 4G mobile broadband,” T-Mobile CEO and President Philipp Humm said. “This is good for T-Mobile and good for consumers because it will enable T-Mobile to compete even more vigorously with other wireless carriers. We anticipate FCC approval later this summer, in time for us to incorporate this new spectrum into our network modernization and the rollout of LTE services next year.”

T-Mobile will gain spectrum covering 60 million people — notably in Philadelphia; Washington, D.C.; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; Charlotte, N.C.; Raleigh-Durham, N.C.; Greensboro, N.C.; Memphis, Tenn.; and Rochester, N.Y. — in exchange for spectrum covering 22 million people and certain cash consideration. The agreement also includes exchanges in a number of markets in which the companies will swap licenses to create more contiguous blocks of spectrum and re-align spectrum in adjacent markets. These intra-market swaps will enhance T‑Mobile’s network performance and data throughput in key locations. This agreement is in addition to T-Mobile’s previously announced $4 billion 4G network evolution plan, which includes modernization of 37,000 cell sites, launching 4G HSPA+ services in the 1900 MHz band and deployment of LTE in 2013.

About T-Mobile USA:

Based in Bellevue, Wash., T-Mobile USA, Inc. is the U.S. wireless operation of Deutsche Telekom AG (OTCQX: DTEGY). By the end of the first quarter of 2012, approximately 129 million mobile customers were served by the mobile communication segments of the Deutsche Telekom group — 33.4 million by T-Mobile USA — all via a common technology platform based on GSM and UMTS and additionally HSPA+ 21/HSPA+ 42. T-Mobile USA’s innovative wireless products and services help empower people to connect to those who matter most. Multiple independent research studies continue to rank T-Mobile USA among the highest in numerous regions throughout the U.S. in wireless customer care and call quality. For more information, please visit http://www.T-Mobile.com. T-Mobile is a federally registered trademark of Deutsche Telekom AG. For further information on Deutsche Telekom, please visit www.telekom.de/investor-relations.

Eric Ravenscraft
Eric is a snarky technophile with a taste for the unusual. When he's not obsessing about Android, you can usually find him obsessing about movies, psychology, or the perfect energy drink. Eric weaves his own special blend of snark, satire, and comedy into all his articles.

  • http://twitter.com/SParKlngCyaNide SparklingCyanide

    Now this is how you deal with Spectrum, in a way that benefits multiple Carriers.  Both Verizon and especially T-Mobile will be benefiting very much from this deal.  T-Mobile is really gaining very much on spectrum lately and I believe that in 2013 T-Mobile's network will be more rock solid than it's been in years, very exciting.  I live in the Detroit Metro Area and our HSPA+ 42 coverage in the suburbs is already Terrific, I eagerly await to reap the benefits of all these deals in the 1900 PCS refarm and release 10 LTE very soon.  Magenta is FINALLY making some moves that matter, and I quite like that.

    • http://twitter.com/WillieFDiazSF William Diaz

      Now that Im out of contract on T-Mobile and moved to Monthly 4G $30 Unlimited Data/Text 100Anytime plan, Ive noticed in my specific neighborhood in San Francisco, that my speed has increased a good 3-10x and Im only using a MyTouch 4G phone, so imagine going from 200-300kbps up to 2mbps - 5mbps INSIDE my house.

      Lucky for me, I actually live in an area of the city that is being refarmed and tested with 1900Mhz HSPA+. Unfortunately, my iPhone 3G isnt unlocked nor does the screen work fully in order for me to test it out. But yes, T-Mobile has made the biggest advances in their network in the last 3 months since AT&T handed over some spectrum, and T-Mobile can now start refarming. 

      • http://ashn.myopenid.com/ Ash

        The 1900 doesn't just benefit iPhones, just think Galaxy nexus (Or any phones) having all the 3G bands, how good the coverage would be for those phones.

  • Alex Cervantes

    Could this mean more T-mobile coverage? I would love to switch to them once my Verizon contract is up.

    • http://twitter.com/WillieFDiazSF William Diaz

      It may not mean more T-Mobile coverage, however it will mean a more stable, reliable and data optimized network in those areas. This is spectrum they are swapping, which is needed in certain areas in larger amounts to best compete. While they COULD build "out" on it, they likely will build "up" with it instead.

  • joe_attaboy

    This sounds very good to me. I live in northeast Florida and work in Washington DC, and more connectivity is always a good thing. 

  • Kdb424

    If that's true, guess who just last a customer? Verizon! That's around the time my contract is up.

  • http://twitter.com/DroidKl0wn Droid Kl0wn

    Sounds great...but if you think you're gonna keep your low monthly bill with Tmo, think again. I'm sure we will be on this site in a year bitching about the price increase because of LTE ;O)

  • Alan

    I assume this is similar to the agreement Orange UK and T-Mobile have to allow customers to share networks?

    • http://twitter.com/WillieFDiazSF William Diaz

       Not at all. The "Everything Everywhere" deal of T-Mobile and Orange merging networks was like Cingular and AT&T merging networks and how AT&T customers could roam onto Cingular anywhere they wanted like it was a home network and Cingular could only use AT&T where Cingular didnt have its own network but AT&T did. 

      This deal is just swapping some spectrum in one area that Verizon needs more of, T-Mobile has a surplus. And swapping in other areas that T-Mobile needs to better compete against Verizon where Verizon has a comparable surplus. This is completely not the same thing as a "merger" of networks. Neither company is merging any network, allowing roaming, or even building out anything compatible with the other, they simply are swapping some radio spectrum from one to another.

  • http://twitter.com/WillieFDiazSF William Diaz

    A net of 38 Million people is good, but T-Mobile will actually not be serving those customers. This is equal to the State of California's population, nationwide. Unfortunately, gaining only a net of 38 Million pops isnt exactly a deal, considering T-Mobile is likely going to pay Verizon a slight premium over the actual cost from SpectrumCo and Leap, not to mention trade some spectrum in other areas T-Mobile looks not to compete, which in my opinion only strengthens the existing Duopoly. Carriers need spectrum, and they need the most compatible spectrum available, but wasnt LTE and the next generation networks supposed to bring ubiquity and harmony among carriers and roaming and competitiveness? Separating networks into completely incompatible and proprietary wireless messes is only going to cost the consumers even more in the long run with the higher device costs, incompatible spectrum when its all exhausted and they need more, not to mention no roaming between networks or incentive to build out. 
    T-Mobile should also tread this very lightly since this news puts T-Mobile in a very precarious position.

  • Vinnie

    T-Mobile: Hey, Mom(the FCC)!!!! Verizon is hogging all the spectrum!!
    Verizon: .....isn't that what you and AT&T tried to do last month?
    T-Mobile: Yeah, but...............hey, we won't snitch if you share with us!

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