US incumbent AT&T has agreed to acquire spectrum in the 700MHz B band from competitor Verizon Wireless for US$1.9bn. On top of the cash payment it will also pass on a number of its own spectrum licences to Verizon in return.
In an SEC filing AT&T said…
US incumbent AT&T has agreed to acquire spectrum in the 700MHz B band from competitor Verizon Wireless for US$1.9bn. On top of the cash payment it will also pass on a number of its own spectrum licences to Verizon in return.
In an SEC filing AT&T said the acquisition of 39 licences complements its holdings in the 700 MHz B band and will allow it to continue to deploy 4G LTE services.
Verizon offered to sell the spectrum last May to appease the Department of Justice (DOJ) as it looked to get regulatory approval for its US$3.9bn purchase of AWS spectrum from cablecos, which was eventually cleared with conditions.
AT&T is paying the sum in cash and will also give Verizon AWS 10MHz licences in five US markets.
The 700MHz licenses acquired by AT&T cover 42 million people in 18 states.
The transaction is subject to regulatory approval from the Federal Communications Commission (FCC) and the DOJ. AT&T anticipates closing the transaction in the second half of 2013.
PE buys further Verizon licences
Separately, Verizon announced that Grain Management, a Florida-based private equity firm, had bought three AWS licences in North Carolina for US$189m.
Stephens Inc and Loop Capital Markets advised Verizon on the sale process.
Including today’s transactions Verizon has now sold or agreed to sell all of its 77 licences in the lower 700MHz spectrum it said it would dispose last May.
However, according to New Street Research Verizon is still in a stronger position than its competitors when it comes to spectrum.
“AT&T is in a materially worse spectrum position than Verizon, in our view,” said analyst Jonathan Chaplin in a note. “All told, AT&T will have 26 MHz that they can deploy for LTE immediately and 28 MHz of WCS which we believe they can deploy in late 2015, compared to Verizon who now has 35 MHz that is all immediately deployable”.
Even after the deal AT&T will have less spectrum per subscriber than Verizon, Sprint Nextel and T-Mobile USA.
