T-Mobile US has purchased 10 megahertz of Advanced Wireless Services (AWS) spectrum from U.S. Cellular for $308 million in cash to help in the incremental roll-out of its LTE network coverage to new markets and expands the existing 4G LTE bandwidth in the important Mississippi Valley region.
The spectrum, which covers 32 million pops in 29 markets in the Mississippi Valley region, will allow the rollout of LTE in St. Louis, Mo.; Nashville, Tenn.; Kansas City, Mo.; Memphis; Lexington, Ky.; Little Rock-North Little Rock, Ark.; Birmingham, Ala.; New Orleans; and Louisville, Ky.
John Legere, president and CEO of T-Mobile US, said in a prepared statement, “This is a rare opportunity to secure precious AWS spectrum in key markets that will immediately be put to use by both T-Mobile and MetroPCS customers. This deal expands our network and capacity, allowing for a broader roll-out of 4G LTE and an even faster and more reliable 4G experience for our customers – in addition to spurring competition in the wireless marketplace.”
U.S. Cellular sold its Chicago, St. Louis, central Illinois and three other Midwest markets to Sprint Nextel for $480 million in November 2012, opting to concentrate on markets where it has a higher penetration rate. The deal closed earlier this year.
“Following the market divestiture that closed in May, we have been seeking opportunities to monetize other non-strategic assets,” said Kenneth Meyers, U.S. Cellular president and CEO. “We’re pleased to have achieved significant value for this spectrum license, as we continue to evaluate opportunities to create additional value for our shareholders.” U.S. Cellular was advised on the T-Mobile transaction by Media Venture Partners.
Migration of MetroPCS Customers Ahead of Schedule
T-Mobile US is also seeing the spectrum benefits of its merger with MetroPCS. As customers leave the MetroPCS network, the freed up spectrum is added to the company’s LTE network. Deploying the spectrum on a single network provides a path to double T-Mobile US’ initial LTE deployment to 20 megahertz and 20 megahertz of spectrum in 90 percent of the top 25 metro areas planned for 2014 and beyond.
Just two weeks after becoming one company, T-Mobile US leveraged the compatibility of existing MetroPCS LTE handsets and enabled them to connect to its LTE network in Las Vegas, doubling the LTE spectrum deployment in Las Vegas and increasing data speeds for both T-Mobile and MetroPCS customers with capable devices.
As its LTE network expands to more cities, T-Mobile will continue to migrate MetroPCS customers with LTE-capable handsets and leverage MetroPCS’ spectrum to expand the combined companies’ LTE coverage.