Following AT&T’s failed attempt to acquire T-Mobile USA from Deutsche Telekom for $39 billion, AT&T had to pay a lofty break-up fee as per the terms of its agreement. AT&T’s related expenses totaled $4 billion, and included in that sum was the transfer of AWS spectrum licenses to T-Mobile in 128 different markets. On Wednesday, T-Mobile announced that the Federal Communications Commission has approved the transfer. ”We applaud the FCC for acting swiftly to approve the transfer of these spectrum licenses,” T-Mobile CTO Neville Ray said in a statement. The nation’s No.4 carrier will use its newly acquired spectrum to help build out its next-generation 4G LTE network, which it hopes to launch next year.

Verizon Wireless is planning to conduct an open sale of all of its 700 MHz A and B spectrum licenses in an effort to rationalize its spectrum holdings. The carrier obtained the 700 MHz A and B licenses — as well as a nationwide 700 MHz upper C license, which is currently used for its 4G LTE service — in an auction through the Federal Communication Commission. Verizon is in the midst of acquiring additional Advanced Wireless Services (AWS) spectrum licenses that it plans to use in conjunction with its 700 MHz upper C spectrum to deploy additional LTE markets, and this proposed 700MHz A and B sale will only be conducted if Verizon’s AWS acquisition is successful. The spectrum licenses cover dozens of major markets such as New York, Philadelphia, Detroit, Dallas, Los Angeles and San Francisco. Verizon’s press release follows below.

Verizon Wireless To Conduct Spectrum License Sale

BASKING RIDGE, NJ — Verizon Wireless today announced plans to conduct an open sale process for all of its 700 MHz A and B spectrum licenses in order to rationalize its spectrum holdings. The licenses cover dozens of major cities across the country, as well as a number of smaller and rural markets.

Verizon Wireless obtained the 700 MHz A and B licenses, as well as nationwide 700 MHz upper C licenses (with the exception of Alaska which has since been acquired), in FCC Auction 73 in 2008. Verizon Wireless is deploying its 4G LTE network, which currently covers more than 200 million people, on its nationwide 700 MHz upper C spectrum. If Verizon Wireless is successful in acquiring additional AWS (Advanced Wireless Services) spectrum licenses, it will use AWS spectrum in conjunction with its 700 MHz upper C band spectrum to deploy additional LTE capacity.

Accordingly, the sale of the A and B licenses is contingent on the close of Verizon Wireless’ pending purchases of AWS licenses from SpectrumCo (an entity jointly owned by Comcast, Time Warner Cable, and Bright House Networks), Cox and Leap Wireless. These transactions are at varying stages of review by the Federal Communications Commission (FCC) and the Department of Justice (DOJ) and are expected to close by mid-summer.

The company is announcing the sale plans now and will begin the process of soliciting interest from potential buyers to ensure the process can move forward quickly once the AWS license transfers have been completed.

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers,” said Molly Feldman, vice president of Business Development for Verizon Wireless. “Moreover, provided our acquisition of AWS spectrum is approved, our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers.”

Stephens Inc., a nationally recognized, independent financial services firm based in Little Rock, Arkansas, has been engaged to manage the offering process. Interested parties may contact Stephens Inc. at vz_spectrum@stephens.com or 501-377-8134. Stephens Inc. will later release information about efforts to reach out to potential bidders, including minority-owned and female-owned businesses, to participate in the process. All sales will be subject to applicable regulatory approvals.

Following is a list of the markets covered by the 700 MHz A and B licenses:

A Block Licenses (Economic Areas)

New York, Philadelphia, Washington-Baltimore, Orlando, Miami, Tampa, Atlanta, Cincinnati, Cleveland, Detroit, Grand Rapids, Indianapolis, Kansas City, Minneapolis, Oklahoma City, Dallas, Austin, Houston, San Antonio (CMA area only), Denver, Los Angeles, Fresno, San Francisco and Sacramento

B Block (Cellular Market Areas)

Los Angeles, Chicago, Miami, Cincinnati, Rochester, Memphis, Oklahoma City, Greensboro-Winston Salem, Charlotte, Youngstown, Raleigh-Durham, West Palm Beach, Fort Collins, Pueblo and Colorado 4 – Park; Bradenton and Florida 3- Hardee; Athens, GA; Idaho 5 – Butte; Lake Charles, Alexandria, Louisiana 1- Claiborne, Louisiana 2 – Morehouse and Louisiana 3 – De Soto; Maryland 3 – Frederick; Billings, Great Falls, Montana 8 – Beaverhead, and Montana 9 – Carbon; Nevada 3 – Storey; New Mexico 5 – Grant and New Mexico 6 – Lincoln; Rapid City and South Dakota 1 – Harding; Lubbock, Amarillo, Waco, Longview-Marshall, Tyler, Texarkana, Odessa, Laredo, Midland, Texas 2 – Hansford, Texas 6 – Jack and Texas 18 – Edwards; Utah 1 – Box Elder, Utah 4 – Beaver, Utah 5 – Daggett and Utah 6 – Piute; Virginia 10 – Frederick; Washington 2 – Okanogan; Casper and Wyoming 2 – Sheridan

T-Mobile is urging federal regulators to block Verizon’s planned spectrum acquisition from SpectrumCo, a joint venture formed by Comcast, Time Warner and Bright House Networks. Verizon’s pending purchase could be worth $3.9 billion and would help the company build out its nationwide LTE network. In a filing late Tuesday, T-Mobile said the Federal Communications Commission should block the deal because it would place an “excessive concentration” of wireless spectrum in Verizon’s hands, reports the Associated Press. The AWS bands that Verizon is looking to acquire uses the same frequencies that T-Mobile uses for its HSPA+ network. T-Mobile claims that the nation’s No.1 carrier already has a large amount of spectrum and does not need any more, and T-Mobile can “quickly, more intensively, and more efficiently” put the spectrum to use compared to Verizon. MetroPCS, the nation’s fifth-largest wireless provider, also urged the FCC to block the deal, claiming both parties had not provided enough information to prove that the acquisition is in the public’s best interest. Verizon and SpectrumCo hope to close the deal by the middle of this year.

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T-Mobile and AT&T have filed with the Federal Communications Commission to transfer $1 billion worth of AT&T’s AWS spectrum into T-Mobile USA’s ownership. AT&T previously promised the spectrum to Deutsche Telekom in the event that its bid to acquire T-Mobile USA failed. “This additional spectrum will help meet the growing demand for wireless broadband services,” Tom Sugrue, T-Mobile’s senior vice president for government affairs, told The Wall Street Journal. “We hope the FCC will move swiftly to approve the license assignments.” As The Wall Street Journal points out, T-Mobile desperately needs the spectrum in order to compete with Sprint, AT&T and Verizon Wireless. Each of those aforementioned carriers have already started to, or already have plans to, roll out faster 4G LTE networks this year. T-Mobile has not discussed any firm plans regarding how it will advance beyond its current HSPA+ network.

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The BlackBerry Curve 9370 and the LG Spectrum are now available from Verizon Wireless. The LG Spectrum was unveiled during the Consumer Electronics Show in Las Vegas last week. It runs Android Gingerbread, has a sharp 4.5-inch True HD IPS display, a dual-core 1.5GHz processor, an 8-megapixel camera capable of recording 1080p video and support for Verizon’s 4G LTE network. The Spectrum is priced at $199.99 with a new two-year Verizon contract. Also joining Verizon’s smartphone lineup on Thursday is RIM’s BlackBerry Curve 9370. The Curve 9370 is the slimmest Curve ever and offers GPS and Wi-Fi support, a 5-megapixel cameras and runs RIM’s BlackBerry 7 operating system. The new Curve is priced at $99.99 with a new two-year contract after a $50 mail-in rebate.

Two of Verizon’s newly announced 4G LTE smartphones have unannounced global roaming capabilities, however they will not be usuable at launch. The Motorola DROID 4 and LG Spectrum, which were both announced this week at the Consumer Electronics Show, both contain GSM and CDMA radios for data usage overseas. However, due to upcoming network enhancements, both devices will soon be able to take advantage of their global capabilities. “The LTE phones work globally in over 40 countries that currently use CDMA technology,” said Verizon spokeswoman Brenda Raney. “For the new LTE phones to provide global roaming voice and data in non-CDMA countries, we are working on a few network enhancements so we can provide customers with the best voice and data roaming experience. We anticipate this capability to be available this year, likely the first half of the year.”

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LG’s press conference in Las Vegas just wrapped up and we quickly stormed the stage to grab you a few photos of Verizon’s latest smartphone, the LG Spectrum. The Spectrum runs Android 2.3 (Gingerbread) but Verizon promises that it will upgrade the device to Android 4.0 (Ice Cream Sandwich) in the future. It offers a 4.5-inch true HD IPS display — it looks amazing up close — an 8-megapixel camera capable of recording 1080p HD video and a 1.5GHz dual-core processor. It also supports Verizon’s blazing fast 4G LTE network. LG wouldn’t let us hold the device in our hands, but we were able to get a good look at its relatively thin design and super sharp screen. It will be available on January 19th for $199.99 with a new two-year contract. Hit our gallery for photos of the LG Spectrum.

Last summer, LG and Verizon Wireless released the Revolution, but the phone did little to revolutionize smartphones and after seven months it was chopped from the carrier’s lineup. According to Droid-Life, the follow-up to the Revolution is the LG Spectrum and it is heading to Verizon on January 19th. The Spectrum features superb specs with a 1.5GHz dual-core Snapdragon S3 processor, 1GB RAM, 4G LTE connectivity and a massive 4.5-inch HD display at 329ppi. Additionally, the device sports an 8-megapixel rear camera, a microSD slot, a 1.3-megapixel front facing camera and a 1,830 mAh battery. The Spectrum will launch with an exclusive HD ESPN ScoreCenter app and the HD Netflix app that is currently only found on the DROID RAZR. With the Consumer Electronics Show beginning next week, we fully expect to see the Spectrum unveiled within the next few days.

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Following the FCC’s approval last week, AT&T announced Tuesday that it has finalized its acquisition of Qualcomm’s 700MHz spectrum licenses. The spectrum, which was previously used for Qualcomm’s FLO TV product, covers more than 300 million United States residents. AT&T said it paid Qualcomm approximately $1.9 billion in the deal. “This spectrum will help AT&T continue to deliver a world-class mobile broadband experience to our customers,” said AT&T SVP-Federal Regulatory Bob Quinn explained recently. AT&T’s full press release follows after the break.

AT&T Completes Purchase of Wireless Spectrum from Qualcomm
Dallas, Texas December 27, 2011

AT&T* announced today that it has completed its acquisition of spectrum from Qualcomm. AT&T purchased 700 MHz spectrum licenses covering more than 300 million people for approximately $1.9 billion.

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

Now that its bid to acquire T-Mobile USA for $39 billion has been put to bed by strong opposition, AT&T has to look elsewhere in an effort to find spectrum that will accommodate the carrier’s ever-growing subscriber base while it transitions to LTE. The carrier is clearly facing an uphill battle but it took a sizable step forward on Thursday evening when the Federal Communications Commission granted approval to AT&T’s proposed acquisition of 700MHz spectrum licenses from Qualcomm. ”This spectrum will help AT&T continue to deliver a world-class mobile broadband experience to our customers,” said AT&T SVP-Federal Regulatory Bob Quinn. AT&T will pay Qualcomm approximately $1.9 billion when the deal closes in the next few days, and the licenses AT&T gains cover more than 300 million people in the United States. AT&T’s press release follows below.

AT&T Receives Regulatory Approval for Purchase of Wireless Spectrum from Qualcomm

Dallas, Texas, December 22, 2011

 

AT&T* announced today that it has received all required regulatory approvals for AT&T’s acquisition of spectrum from Qualcomm. AT&T is purchasing 700 MHz spectrum licenses covering more than 300 million people for approximately $1.9 billion.

“This spectrum will help AT&T continue to deliver a world-class mobile broadband experience to our customers,” said Bob Quinn, senior vice president-Federal Regulatory, AT&T. “We appreciate the FCC Chairman, the Commissioners and their staff for completing its review before the holidays.

“As spectrum is the lifeblood of the U.S. wireless industry, we are pleased that the FCC did not reduce the spectrum screen, however, we continue to believe any changes to the process by which it is allocated should be subject to open and transparent public discussion and clear to everyone with an interest in ensuring the health of our industry.”

The companies expect to close the transaction in the coming days.

LightSquared on Tuesday issued a letter to the Federal Communications Commission ostensibly demanding approval to build out its 4G LTE network. LightSquared executive vice president of regulatory affairs and public policy Jeff Carlisle argued that the GPS industry has had almost 10 years to address issues that cause GPS satellite signals to partially transmit on spectrum that LightSquared has licensed. The letter was written in response to an announcement earlier this week from federal officials, stating that they were still concerned about interference LightSquared’s network causes with GPS equipment after conducting a new investigation into the matter. “LightSquared has had FCC authorization to build its network for over eight years and that authorization was endorsed by the GPS industry, and fully reviewed and allowed to proceed by several other government agencies,” Carlisle wrote in the letter. “Commercial GPS device-makers have had nearly a decade to design and sell devices that do not infringe on LightSquared’s licensed spectrum. They have no right to complain in the eleventh-hour about incompatibility when they had ample opportunity to avoid this problem.” A link to LightSquared’s full letter follows below.

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AT&T is in such need of spectrum following the collapse of its planned acquisition of T-Mobile USA, that one analyst thinks the carrier may soon seek to acquire Dish Network. “Dish and AT&T aren’t direct competitors, and at the end of the day, the government wants to see spectrum used,” Stifel Nicolaus & Co. analyst Christopher King told Bloomberg Tuesday. “It’s highly unlikely regulators would block two AT&T deals in row,” he added, noting that AT&T is “desperate for spectrum.” AT&T wasn’t the only company eyeing a deal with T-Mobile USA, however; Dish Network chief executive officer Joseph Clayton recently said that his company was interested in working with T-Mobile USA to create a national wireless network of its own. Read on for more.

“We want to use it to create a national wireless network, video, voice and data,” Clayton said earlier this month before AT&T bailed on its plans to purchase T-Mobile USA. “We’ve got expertise in satellite-TV, and we will in satellite broadband. The voice part, we’ll need some help with.”

Dish Network’s discussions about a T-Mobile USA partnership could just be a small move in a larger game of chess. King argued that Dish Network chairman Charlie Ergen might be bluffing about creating a nationwide network in an effort to entice another carrier, such as AT&T, to buy the company.

“This is a perfect opportunity for Charlie to get out,” King said. “He’s talking about building a wireless network or being a competitor to get a better deal from AT&T.”

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The antitrust division of the United States Justice Department will investigate Verizon Wireless’s plans to acquire spectrum from Comcast and its partners for $3.6 billion. Verizon Wireless announced in early December its intentions to purchase 122 AWS spectrum licenses from SpectrumCo, a joint venture between Comcast, Time Warner Cable and Bright House Networks. The carrier said it plans to use the additional spectrum to build out its 4G LTE network, pending government approval of the purchase. The Justice Department has the power to block the deal, although it is unclear when the investigation will be concluded. 

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Deutsche Telekom recently detailed the breakup terms AT&T agreed to following the deterioration of its planned acquisition of T-Mobile USA. Deutsche Telekom will receive $3 billion in cash and T-Mobile USA will benefit from fresh AWS spectrum as well as a new 7-year 3G roaming deal with AT&T. “As part of the break-up fee, T-Mobile USA will receive a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets (Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle),” Deutsche Telekom said in a statement. “The UMTS roaming agreement for the U.S. in T-Mobile USA’s favor has a term of over seven years and will allow the company to improve its footprint significantly among the U.S. population and offer its customers better broadband coverage for mobile communications services in the future.” The company also said that T-Mobile USA’s 3G network will grow from blanketing 230 million potential customers to covering 280 million people. Deutsche Telekom’s full press release follows below.

AT&T and Deutsche Telekom terminate agreement on the sale of T-Mobile USA

Dec 19, 2011

• Deutsche Telekom receives record high break-up fee
• AT&T will pay Deutsche Telekom USD 3 billion in cash
• T-Mobile USA will receive a large package of Advanced Wireless Solutions (AWS) spectrum and long-term national UMTS roaming agreement
• Deutsche Telekom’s guidance and planned dividend policy remain unchanged

U.S. telecommunications company AT&T Inc. and Deutsche Telekom have terminated the agreement on the sale of T-Mobile USA to AT&T. As a result, AT&T will pay Deutsche Telekom the break-up fee agreed in the contract signed by both companies dated March 20, 2011. This is one of the highest payments ever agreed between two companies for the termination of a purchase agreement. It includes a cash payment of USD 3 billion to Deutsche Telekom, which is expected to be made by the end of this year. In addition, it contains a large package of mobile communications spectrum and a long-term agreement on UMTS roaming within the U.S. for T-Mobile USA.

Both companies are in agreement that the broad opposition by the U.S. Department of Justice (DoJ) and the U.S. telecommunications regulator (FCC) is making it increasingly unlikely that the transaction will close. Both companies are of the opinion that important arguments in support of the transaction have been ignored, such as the significant improvement in high-speed mobile network coverage for the U.S. market, as well as the positive employment effects. In addition there was no indication that either authority would move away from it’s non-supportive stance in return for concessions from the parties in terms of the scope and structure of the transaction.

As part of the break-up fee, T-Mobile USA will receive a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets (Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle).

The UMTS roaming agreement for the U.S. in T-Mobile USA’s favor has a term of over seven years and will allow the company to improve its footprint significantly among the U.S. population and offer its customers better broadband coverage for mobile communications services in the future. Population coverage will increase from 230 million potential customers at present to 280 million. As a result of the agreement with AT&T, 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 termination of the agreement means Deutsche Telekom will go back to reporting T-Mobile USA as continuing operations in future. Deutsche Telekom’s guidance for the 2011 financial year remains unchanged as a result of this development, with adjusted EBITDA of around EUR 19.1 billion expected. At EUR 6.5 billion, free cash flow is forecasted to remain at the prior-year level or increase slightly. The guidance includes the T-Mobile USA contribution based on the average exchange rate in 2010 of USD 1.33 per euro. The free cash flow forecast does not include the settlement payment of EUR 0.4 billion relating to PTC in Poland or the cash payment of USD 3 billion from the break-up fee to be paid by AT&T.

Deutsche Telekom’s dividend policy also remains unchanged. The annual dividend payments are subject to the necessary board resolutions and other legal requirements.

Even following the termination of the agreement with AT&T, Deutsche Telekom exepects to remain within the communicated ranges for certain financial performance indicators used to assess the financial performance of the company. These are as follows: The ratio of net debt to adjusted EBITDA of the Group is to be between 2 and 2.5, the equity ratio is to be between 25 percent and 35 percent, gearing (ratio of net debt to shareholders’ equity) between 0.8 and 1.2, and liquidity reserves is to cover maturities of at least the next 24 months.

The cash component of the break-up fee directly reduces Deutsche Telekom’s net debt, thereby by strengthening the financial performance indicators affecting the company’s rating.

Deutsche Telekom would like to express its gratitude to AT&T and to Randall Stephenson and his team for the positive cooperation over the past few months. Our working relationship was characterized by fairness and respect at all times.

Cox Communications on Friday announced an agreement that will see Verizon Wireless purchase its 20MHz AWS spectrum licenses for $315 million. Verizon announced a deal to acquire 122 AWS spectrum licenses from Comcast, Time Warner and Bright House earlier this month for $3.6 billion, and this new deal is similar in structure. Verizon Wireless and Cox will sell each other’s residential and commercial products as agents, and Cox may have the option to sell Verizon Wireless service as a wholesale partner in the future. ”These agreements provide Cox customers with key enablers to mobility, such as access to Verizon Wireless’ 4G LTE network and iconic wireless devices,” said Cox Communications president Pat Esserin a statement. “We look forward to the many benefits this will bring to customers.” Cox’s full press release follows below.

Cox Communications Announces Agreement to Sell Advanced Wireless Spectrum to Verizon Wireless

Cox and Verizon Wireless will become agents to sell each other’s residential and commercial products

ATLANTA, Dec. 16, 2011 /PRNewswire/ – Cox Communications announced that it has entered into an agreement to sell to Verizon Wireless its 20 MHz Advanced Wireless Services (AWS) spectrum licenses covering 28 million POPs for $315 million. The sale of Cox’s AWS spectrum to Verizon Wireless is an important step to ensure that consumers’ growing demands for mobility will be met. This agreement does not include Cox’s 700 MHz spectrum licenses, the company’s Cox Wireless customer accounts or any other assets.

Separately, Cox and Verizon Wireless will also become agents to sell each other’s residential and commercial products and services through their respective sales channels. Over time, Cox may have the option to sell Verizon Wireless’ services on a wholesale basis. In addition, Cox expects to enter into arrangements with the innovation technology joint venture formed by Verizon Wireless, Comcast, Time Warner Cable and Bright House Networks to better integrate wireline and wireless products and services.

“These agreements provide Cox customers with key enablers to mobility, such as access to Verizon Wireless’ 4G LTE network and iconic wireless devices,” said Pat Esser, president of Cox Communications. “We look forward to the many benefits this will bring to customers.”

The sale and transfer of Cox’s advanced wireless spectrum to Verizon Wireless is subject to approval by the Federal Communications Commission and review under the Hart-Scott Rodino Act and other customary conditions.

Cox announced last month that it would no longer sell its Cox Wireless service, but would continue to provide service to its wireless customers through March 30, 2012.