T-Mobile is buying airwaves from Verizon Wireless for about $2.4 billion in cash as part of a spectrum swap. The deal should improve service in areas for both companies, according to Bloomberg.
The deal calls for T-Mobile, the fourth-largest carrier in the U.S., to receive 700-megahertz A-block spectrum licenses. In exchange, Verizon, the largest carrier in the U.S., will get AWS and PCS licenses.
The transaction will give T-Mobile low-band spectrum in nine of the top 10 markets. Verizon gains spectrum in Los Angeles, San Francisco, Dallas, Atlanta, and Detroit.
According to Walt Piecyk, an analyst at BTIG LLC, "This is a big transaction for T-Mobile, but there are still additional pieces of low-band spectrum it can buy to complete the portfolio."
He continues, "This deal proves to be a big win for Verizon, which was able to unload spectrum it bought in 2008 for a big premium."
The T-Mobile/Verizon deal should close by mid-2014.