Deutsche Telekom subsidiary T-Mobile has announced a deal to acquire spectrum licenses from US mobile operator Verizon Wireless. The frequencies are not used by Verizon, but will improve T-Mobile services in the country.
T-Mobile US has bought A Block airwaves in the 700 megahertz frequency band from Verizon Wireless for $2.4 billion (1.76 billion euros) in cash, the US subsidiary of German telecommunications giant Deutsche Telekom announced on Monday.
The spectrum licenses would cover over 150 million people in areas such as New York, Atlanta and Los Angeles,T-Mobile said. The acquisition would improve the mobile operator's high-speed wireless services which were expected to be rolled out on the new spectrum in the fourth quarter of 2014, the company added.
Verizon Wireless, which is owned by Verizon Communications, is a main rival of T-Mobile in the lucrative US mobile market. The company had already tried to sell the spectrum airwaves last year, but Verizon Chief Financial Officer Fran Shammo blocked a deal saying the company would not conduct a fire sale.
T-Mobile raised $1.8 billion through a sale of its common stock last week in efforts to finance the purchase. T-Mobile also said that the transaction included the transfer of spectrum licenses for advanced wireless services (AWS) as well as personal communications services (PCS).
The deal is likely to substantially raise the price for T-Mobile US, which its majority owner, Deutsche Telekom, reportedly hopes to sell off in the near future.
uhe/pfd (Reuters, AFP)