In addition to $3 billion in cash, which AT&T will pay by the end of the year, T-Mobile will receive a "large package" of Advanced Wireless Solutions (AWS) mobile spectrum spanning 128 markets, including 12 of the top 20 (Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle).
The two companies have also signed a seven-year UMTS roaming agreement that will up T-Mobile's population coverage capabilities from 230 million to 280 million potential customers. The carrier will also be able to offer roaming coverage in certain (unspecified) regions it hadn't been able to previously.
All of this is, of course, terrible news for AT&T. The company not only has to take a $3 billion hit in fourth-quarter earnings, it has also ended up with even less mobile spectrum than before it tried to acquire T-Mobile. AT&T says it sorely needs additional spectrum to expand the nascent long-term evolution (LTE) network it debuted in September. AT&T has already rolled out five smartphones designed to run at LTE speeds, but offers support for the network in less than two dozen markets. Had AT&T's acquisition of T-Mobile been successful, the carrier says it would have been able to bring LTE to 97% of the country. At present, AT&T is only planning to extend LTE to 80% of Americans, which would put the company’s network behind Verizon’s LTE network.