AT&T and T-Mobile have asked the FCC to approve the transfer of around $1 billion worth of wireless spectrum that AT&T owes the smaller carrier after its proposed $39 billion acquisition hit the skids.
The spectrum is part of a $4 billion break-up fee that the two companies agreed to in March when the proposed merger was first announced. T-Mobile is also owed $3 billion in cash after AT&T pulled out of the deal on Dec. 19 after facing resistance from the FCC, the Department of Justice, lawmakers, consumer interest groups and fellow carriers.
"This additional spectrum will help meet the growing demand for wireless broadband services," Tom Sugrue, T-Mobile's senior vice president for government affairs, noted in a statement to Market Watch. "We hope the FCC will move swiftly to approve the license assignments."
T-Mobile will receive AWS spectrum in 128 markets, including major hubs like Los Angeles, Boston, San Francisco and Washington D.C. The two companies have also signed a roaming agreement that will allow T-Mobile to expand its network coverage to a wider customer base.
Although $4 billion in cash and spectrum isn't a bad consolation prize, T-Mobile still finds itself in an unenviable position with no 4G plan and a dwindling customer base. Market Watch reports that Deutsche Telekom AG-owned T-Mobile has experienced some robust customer churn since the deal was announced, losing around 849,000 contract customers in the first nine months of 2011.
TMC's Tracey Schelmetic reported last month that several companies have shown interest in partnering with T-Mobile on a 4G rollout, a plan that seems necessary considering the current market conditions. Dish Network and Sprint lead the list of potential partners.
For now, T-Mobile is charged with the task of regaining the customer confidence that was undoubtedly lost during the last 10 months. As we noted earlier, T-Mobile was forced to sit and wait for the deal to go through, setting them even further behind rival carriers in the innovation department.
The FCC is expected to give the green light on the spectrum transfer deal in the coming months.
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Beecher Tuttle is a MobilityTechzone contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.
Edited by Rich Steeves
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