A Closer Look At That $4 Billion T-Mobile Break-up Fee

As the dust settles on 2011’s biggest deal-that-never-was, it’s worth taking a closer look at the exit payout. First, AT&T will pay Deutsche Telekom $3 billion. Second, $1 billion in spectrum assets that AT&T must hand over. T-Mobile USA will receive spectrum licenses in 128 U.S. markets and a seven-year roaming agreement that will expand its reach by 50 million potential subscribers.

AT&T will give T-Mobile blocks of AWS (Advanced Wireless Services) spectrum in 128 Cellular Market Areas, including 12 of the 20 largest in the U.S., Deutsche Telekom said. The carrier will gain spectrum in San Francisco, Boston, Atlanta, Washington, Los Angeles, Dallas, Seattle, and other metropolitan areas, which should help it to serve more subscribers with higher speeds. In addition, T-Mobile will enter into a seven-year roaming agreement with AT&T, which Deutsche Telekom said would allow T-Mobile to reach areas where it has not had a high-speed network or a roaming arrangement until now. With the roaming deal, T-Mobile will reach 280 million U.S. residents, up from the current 230 million.