To supplement the 4G network they have already built, T-Mobile is purchasing added spectrum from Verizon for an unspecified dollar amount plus some of T-Mobile’s spectrum. The swaps will mostly affect networks in major urban areas of the Eastern United States and the Pacific Northwest.
The deal, which involves spectrum licenses in 218 United States markets, is still pending, as Verizon is still in the process of purchasing the spectrum they are now selling. Once Verizon’s purchases of spectrum from SpectrumCo, Cox, and Leap Wireless are closed, the T-Mobile-Verizon deal will be subject to approval from the FCC and Department of Justice.
The upshot for T-Mobile, of course, is a more widespread 4G LTE network, the benefits of which will be seen sometime next year. Verizon will no doubt be receiving a hefty payday, but the main benefit might be ease of management – when the deal is closed, both T-Mobile’s and Verizon’s spectrum will be organized into more contiguous chunks that are easier to view and manage.
All told, Verizon is trading away spectrum covering 60 million people to T-Mobile in exchange for spectrum covering 22 million people and cash considerations. If more corporate trades ended up sounding this much like NBA trades, I wouldn’t be opposed.