Verizon Makes $3.6B Deal for Wireless Spectrum to Boost LTE
December 2, 2011 2:28 PM
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Verizon spends big on spectrum
Deal will require FCC approval
Verizon Wireless announced today that it has entered into an agreement to purchase new wireless spectrum from three different companies. The spectrum will come from Comcast, Time Warner Cable, and Bright House Networks (the three company make up a joint venture called SpectrumCo LLC). The total cost of buying up the spectrum will be $3.6 billion.
The deal will land Verizon 122 Advanced Wireless Services Spectrum licenses that cover 259 million people. Comcast owns the majority of SpectrumCo with 63.6% holdings and will take the biggest part of the money paid out by Verizon. Comcast will get $2.3 billion of the sale proceeds. Time Warner has 31.2% of SpectrumCo and will get $1.1 billion while Bright House Networks has 5.3% and will get $189 million.
Neil Smit, President of Comcast Cable, said, “These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services. We’re excited about this partnership with Verizon Wireless and the future innovations we will bring to consumers.”
The deal is subject to approval by the FCC as well as other closing conditions.
Dan Mead, President and CEO of Verizon Wireless, said, “Americans deserve excellence from a wireless service provider, and innovative wireless companies plan ahead in order to deliver on that expectation. Spectrum is the raw material on which wireless networks are built, and buying the AWS spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers. American businesses and consumers can have confidence that the best wireless network has the foundational resources to deliver on that promise.”
AT&T will have to feel slighted if this deal makes it past regulators after it has fought so hard to get spectrum though purchasing T-Mobile. AT&T’s bid may fail and if so will
owe T-Mobile billions
in break up fees.
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12/5/2011 11:57:51 AM
You say this as though the industry is in a state where a one could enter the market without investing billions upon billions of dollars to even use said spectrum.
I can't even imagine the pricetag that must be associated with all the new infrastructure that will be required to expand their LTE network into these new areas.
I even have my doubts there were even any other suitable buyers, as they could have probably turned a bigger profit had they split it up into more pieces.
Not saying you are incorrect, in theory it would stifle competition, I just don't think said competition exists, or anyone wants to enter a market that is essentially propped up by the government by essentially allowing them to run virtual monopolies in their respective markets.
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