AT&T announced Friday that it will buy spectrum in the 700 MHz band from Verizon Wireless for $1.9 billion, a deal that could mean improved mobile broadband service for AT&T subscribers in Colorado and the Rocky Mountain region.
With the ongoing explosion of mobile data consumption, AT&T and other carriers are starved for spectrum – the airwaves that carry cellphone traffic.
AT&T is perhaps more capacity constrained than other carriers because it serves the highest number of iPhone users, many of whom are still on unlimited data plans, which the company no longer offers. AT&T was the exclusive wireless provider for the bandwidth-hogging iPhone for nearly four years.
AT&T only recently launched 4G LTE service in the Denver area, and reports from subscribers are that the service is choppy.
The licenses AT&T will acquire cover 42 million people in Colorado and 17 other states, including New Mexico, Utah and Wyoming.
The deal, which requires regulatory approval, is expected to close during the second half of this year.
Dish Network impact
The Verizon-AT&T deal may eliminate another potential partner for Dish Network, which has said it plans to enter the mobile broadband business by teaming up with an existing carrier.
The Douglas County-based satellite-TV provider spent about $3 billion acquiring spectrum in recent years but has been unable to cut a deal with a carrier, and the list of possible partners is dwindling.
No. 3 carrier Sprint Nextel has agreed to merge with Tokyo-based Softbank and the parent company of No. 4 carrier T-Mobile is acquiring regional player MetroPCS.
Wells Fargo analyst Marci Ryvicker said investors are worried that Dish is “running out of options.” But she believes the AT&T-Verizon transaction, and a previously announced deal between AT&T and Atlantic Tele-Network, shows that Dish is sitting on “an extremely valuable asset.”
