AT&T, T-Mobile Weigh Bids For Verizon Wireless Spectrum

AT&T is considering a bid for a block of spectrum licenses held by Verizon Wireless, setting up a potential contest for the airwaves with smaller rival T-Mobile, people familiar with the matter said.

The block of airwaves is highly valued for its ability to carry signals for long distances and penetrate buildings. Verizon bought the spectrum for about $2.4 billion, and it is expected to command up to $2.75 billion in a sale, telecom analyst Jonathan Chaplin of New Street Research said. AT&T, like other carriers, is looking around for spectrum to carry growing data traffic, and the Verizon airwaves fit well with its current holdings. T-Mobile, which the people familiar with the matter said is also considering a bid, needs the low-band spectrum to bolster its network, which runs primarily on higher frequencies. The Verizon spectrum is, technically speaking, in the "A block" in the lower 700 megahertz frequency. Availability of such spectrum is limited, and regulators have suggested there should be caps placed on ownership so that it isn't monopolized by industry leaders Verizon and AT&T, which already own roughly 75% of the low-band spectrum currently in use by wireless carriers. A deal for the A-Block could complicate AT&T's effort to keep regulators from imposing ownership limits on lower-band spectrum in upcoming government auctions. T-Mobile and Sprint have argued for such limits.