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Assuming regulators would approve such a deal, Verizon just screwed the prospects of a T-Mobile hookup with a cable company if the AT&T deal does indeed go all the way south. Verizon Wireless has announced that it is purchasing 122 AWS-1 spectrum licenses for $3.6 billion from SpectrumCo covering 259 million POPS in the United States. SpectrumCo is a joint venture between Comcast, Time Warner Cable and Bright House Networks. Comcast owns 63.6% of SpectrumCo and will receive $2.3 billion from the sale; Time Warner Cable owns 31.2% and will receive $1.1 billion; and Bright House Networks owns 5.3% and will receive $189 million.
The deal will also include several product and service agreements, allowing each company to sell the other’s products and down the road, each of the cable companies will be able to sell Verizon Wireless service wholesale. A separate deal allows for the cable companies and Verizon Wireless to create “an innovation technology joint venture for the development of technology to better integrate wireline and wireless services.”
Assuming this deal receives regulator and FCC approval, T-Mobile’s situation just got a lot more precarious. If we continue our assumptions for a minute and the AT&T, T-Mobile does indeed end up with both parties walking away from one another, a likely partner hookup for T-Mobile was one of the SpectrumCo cable companies; each of whom owned spectrum in the same arena as T-Mobile. On another hand, if T-Mobile decided to go at it alone it would likely build an LTE network on AWS-1 bands. If the FCC approves this Verizon/SpectrumCo deal, that adventure just got a lot more difficult. I believe there was some hope in some camps that Deutsche Telekom could have taken the AT&T breakup fee and purchased this same spectrum possibly providing a route for T-Mobile’s LTE rollout offering a much-needed infusion of spectrum to T-Mobile’s network.
This is one story we’ll definitely be keeping an eye on, especially in the event the AT&T, T-Mobile deal continues to fall apart.