June 25, 2012 | by Andrew Kameka
T-Mobile announced today that it has reached an agreement with Verizon to license AWS spectrum in select U.S. markets. The deal will give T-Mobile USA more spectrum in key markets and improve the carrier’s 4G network, including the LTE network rollout planned for 2013.
“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,” T-Mobile CEO Phillipp Humm said in a statement. “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.”
The deal is contingent on government approval because T-Mobile is licensing spectrum Verizon technically doesn’t own yet. Some of the spectrum involved in the deal is from Verizon’s acquisition from Cox, Leap, and SpectrumCo, and these transactions have yet to close. The FCC must then approve the T-Mobile/Verizon deal.
T-Mobile and Verizon will swap licenses in some markets and have a cash deal in others. In all, this deal should see improved 4G coverage options in 218 markets covering 60 million people. Key affected markets including 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.
If approved, an agreement with Verizon should help T-Mobile’s effort to improve 4G options. The company did not pursue an LTE strategy until its failed merger with AT&T was blocked by the government, putting it far behind Verizon and AT&T. The $4 billion earned from that deal will help T-Mobile redeploy spectrum and upgrade cell sites to launch LTE next year.