The Great Spectrum Swap

On June 25, Verizon Wireless announced an agreement with T-Mobile USA to exchange specific spectrum in the Advanced Wireless Services (AWS) band. The deal encompasses spectrum in 218 areas, and would improve T-Mobile’s spectrum position in 15 of the top 25 markets in the US, notably Philadelphia, Washington (DC), Detroit, Minneapolis, Seattle, Cleveland, Columbus (OH), Milwaukee, Charlotte (NC), Raleigh (NC), Greensboro (NC), Memphis, and Rochester (NY). Under the agreement, both companies also will receive additional spectrum depth in specific markets to meet Long Term Evolution (LTE or 4G) capacity needs and enable LTE expansion. 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 were not disclosed. 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.