AT&T buying wireless spectrum from Verizon

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AT&T is moving to shore up its wireless spectrum with a deal to acquire capacity from Verizon for $1.9 billion.

The deal comes days after AT&T announced it is buying Alltel’s U.S. retail wireless operations from Atlantic Tele-Network for $780 million. That deal also includes the acquisition of licenses for wireless airwaves. Alltel’s network covers about 4.6 million people in six states, including Georgia.

The spectrum from Verizon will allow AT&T to reach 42 million people in 18 states, the company said. In addition to cash, AT&T will give Verizon unneeded spectrum licenses in five markets, mainly in the West.

As the demand for mobile Internet services grows due to the surge in smartphone, tablet and other wireless device sales, companies are trying to stay ahead of the demand by boosting high-speed wireless capacity.

AT&T and Verizon are in a fierce battle for wireless customers despite Friday’s deal. AT&T reported Thursday that it added 1.4 million contract customers last year, but that compares with Verizon’s addition of 5 million such customers for the year. Contract customers are the most lucrative for the companies.

More spectrum means the delivery of services without disruption or bandwidth traffic jams, and AT&T probably will use the additional capacity to augment its 4G LTE deployment, according to CNET.  T-Mobile USA and MetroPCS are merging to combine their spectrum for better service for both of their customer bases, CNET noted.

5 comments Add your comment

Alphare

January 25th, 2013
2:16 pm

Spectrum is a public property. Does that mean the public will get some discount for data services?

Sid

January 25th, 2013
3:05 pm

Dream on, Alphare….It’s fun to fantasize….

Me

January 25th, 2013
3:44 pm

It’s public property that is auctioned off for billions of dollars. These companies have to make a return on those investments. They are also not able to write-off the spectrum cost as a capital investment.

woodrow

January 25th, 2013
3:48 pm

Nobody really understands what AT&T is doing except AT&T. I feel like they are trying to grow their business. For some people, that is not a welcome thing. I’m not sure why. If you want better service, supporting their goals are helping you. Wishing them ill will ultimately will make your service worse and more expensive. So be careful what you wish for.

jules

January 26th, 2013
12:11 pm

I’m not sure why this is news. Unless it means that AT&T will be able to provide service equal to what Verizon offers. AT&T may have ‘cool’ phones, but if it’s reliable, quality service you need, you can’t beat Verizon.