AT&T and T-Mobile file for the FCC to approve transfer of AWS spectrum
Following AT&T’s failed $39 billion takeover bid last year, the two companies have now filed with the FCC to transfer some of AT&T’s AWS spectrum to T-Mobile.
The AWS transfer is a condition of the $6 billion break up fee which AT&T will pay to T-Mobile’s parent company, Deutsche Telekom.
AT&T will transfer AWS spectrum in 128 market areas, including 12 of the top 20 markets in the US: Atlanta, Boston, Baltimore, Dallas, Denver, Houston, Los Angeles, Phoenix, San Diego, San Francisco, Seattle and Washington, D.C.
“This additional spectrum will help meet the growing demand for wireless broadband services,” said Tom Sugrue, T-Mobile’s senior vice president for government affairs. “We hope the FCC will move swiftly to approve the license assignments.”
In addition to the spectrum transfer, the break up fee includes $3 billion in cash, which Deutsche Telekom has said it expects to be paid by year end. The fee also includes a seven-year UMTS roaming agreement that will extend T-Mobile’s PoPs from 230 million to 280 million.
In December 2011, Deutsche Telekom’s CEO Rene Obermann conceded that this arrangement will not provide a final solution to the company’s problems as it seeks to find a path to LTE. He said: “In the long term, we need more spectrum and network capacity. We are working on that."
There is ongoing speculation about what form any longer-term solutions might take, which include the sale of T-Mobile’s network of 7,000 towers to gerenate cash, and the acquisition of US providers Dish Networks or Clearwire Corporation. See here for further details.