Verizon Wireless announced on Monday that it has reached an agreement with T-Mobile USA in which both companies will swap spectrum in the advanced wireless services (AWS) band. Verizon said that the deal includes a spectrum transfer and a cash payment from T-Mobile but that the whole transaction is reliant on Verizon's planned purchase of additional bandwidth from SpectrumCo, Leap and Cox. "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. "The AWS licenses we'll acquire from T-Mobile and through SpectrumCo, Cox and Leap will be used to add capacity to our 4G LTE network." The details of T-Mobile's cash payment to Verizon were not disclosed.
T-Mobile said the transaction will improve T-Mobile's position in 15 of the top 25 U.S. markets. It will use the additional spectrum, which covers more than 60 million people, to begin rolling out its 4G LTE network next year.
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VERIZON WIRELESS AND T-MOBILE USA AGREE TO TRANSFER SPECTRUM HOLDINGS
Agreement Enables LTE Expansion and Benefits Customers of Both Companies
BASKING RIDGE, NJ – Verizon Wireless today announced an agreement with T-Mobile USA to exchange specific spectrum in the AWS (Advanced Wireless Services) band. Under the agreement, both companies also will receive additional spectrum depth in specific markets to meet LTE (Long Term Evolution) capacity needs and enable LTE expansion. Since this agreement includes spectrum that will be purchased by Verizon Wireless in its transactions with SpectrumCo, Cox and Leap, this agreement is contingent on the closing of those transactions.
The agreement includes a number of intra-market spectrum swaps that will result in better use of the AWS band for both companies. The agreement also includes exchanges of spectrum between the companies in numerous markets which result in an overall net transfer of spectrum from Verizon Wireless to T-Mobile and a cash payment from T-Mobile to Verizon Wireless. Financial terms of the agreement are not being disclosed. The license transfers require FCC approval which is expected later this summer.
"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. "The AWS licenses we'll acquire from T-Mobile and through SpectrumCo, Cox and Leap will be used to add capacity to our 4G LTE network."
The agreement between Verizon Wireless and T-Mobile is a private commercial arrangement that will allow both companies to optimize their respective spectrum holdings for LTE deployment and to meet their customers' needs.
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