As AT&T struggles to keep its deal with T-Mobile alive, Verizon Wireless has struck a deal to get some new spectrum of its own, buying some off SpectrumCo, LLC for $3.6 billion.
If regulators approve the agreement, Verizon Wireless will add 122 advanced wireless spectrum licenses, bolstering its leadership position in wireless services.
"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," said Dan Mead, Verizon Wireless' president and CEO.
The owners of SpectrumCo will share in the proceeds according to their equity position. Comcast, which owns 63.6 percent of SpectrumCo, will receive $2.3 billion. Time Warner Cable, which owns 31.2 percent will receive $1.1 billion and Bright House Networks, owner of 5.3 percent of SpectrumCo, will receive about $189 million.
As part of the deal, Verizon and SpectrumCo. have formed a joint venture to develop new technology to integrate wireline and wireless products. They've also entered into several agreements to sell each other's products.
"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," said Neil Smit, Comcast Cable's president.
Spectrum is considered a scarce resource right now, and wireless companies are scrambling to add more to meet consumer demand for mobile services. Congress is currently evaluating bills to free up more spectrum to be offered at auction, but even after those bills are passed it would still be several years before the spectrum could be deployed. For now, buying up whatever they can is the quickest and best option for wireless services.