T-Mobile Gets Spectrum in AT&T Breakup
T-Mobile US Inc. is getting more mobile broadband-capable spectrum and a wider 3G roaming footprint in the U.S. as part of the breakup terms linked to AT&T Inc. (NYSE: T)'s failed merger with the Deutsche Telekom AG (NYSE: DT) unit, the German parent company revealed Tuesday morning.
It has been known since the $39 billion deal was announced in March that DT would get a $3 billion payment if the merger failed. AT&T will take a $4 billion hit, including accounting charges, before the end of year.
The spectrum and roaming additions are, however, a fresh sweetener to the generally bitter pill for DT and T-Mobile USA. The fourth-ranked American carrier will get:
- A large package of AT&T's Advanced Wireless Services (AWS) spectrum in "128 Cellular Market Areas, including 12 of the top 20 markets." These will include spectrum packets in Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle. T-Mobile uses the AWS spectrum (1700/2100MHz) for its current fast high-speed packet access-plus (HSPA+) 3G service, which it markets as "4G." (See Verizon & T-Mobile Expand Mobile Broadband .)
- AT&T is also inking a seven-year 3G UMTS roaming agreement with T-Mobile USA. This will allow T-Mobile to increase its population coverage footprint from 230 million potential customers at present, to 280 million. The deal means that "coverage will be extended to many regions of the U.S. in which T-Mobile USA previously had neither its own high-speed mobile communications network nor the associated roaming agreements," the companies say.
Why this matters At the very least, the additional AWS spectrum will give T-Mobile the opportunity to further upgrade its HSPA+ service. As handsets with a two-by-two array of "smart antennnas" arrive, the carrier could ramp up the theoretical maximum top-speed of its broadband service to 84Mbit/s. Company officials have already discussed this eventuality. (See 4G World: Faster 3G in US – Charting HSPA+.) What is less clear is whether T-Mobile could now repurpose some of the AWS spectrum to use for a Long Term Evolution (LTE) service, much like Sprint Corp. (NYSE: S) plans to do with some of its existing bandwidth. We hope to update you on this soon. (See Sprint: First LTE Site Is 'Up & Running'.)
Read more Ride this roller coaster of an M&A attempt one more time here.
— Dan Jones, Site Editor, Light Reading Mobile