Verizon gains LTE spectrum, helps Time Warner, Comcast, into carrier space
Verizon will pay $3.6 billion for LTE spectrum and in turn let the cable companies resell its services as MVNOs.
Sprint was the carrier voted mostly likely to cuddle up to cable companies Comcast and Time Warner, but it's Verizon Wireless that today announced a game-changing agreement with SpectrumCo, the joint venture between Comcast, Time Warner and Bright House Networks.
The deal gives Verizon 122 new spectrum licenses for its LTE network, at a price of $3.6 billion, and the cable companies the right to eventually sell Verizon products and services. The spectrum is enough for Verizon to cover an additional 259 million people, and its payment will be divvied up such that $2.3 billion will go to Comcast, $1.1 billion to Time Warner and $189 million to Bright House.
"There's no question that we live in a world that is becoming more connected and more mobile every day," Comcast President Neil Smit wrote in a blog post, adding that the deal could eventually also give Comcast carrier status.
Four years from signing, Comcast could become a reseller of Verizon Wireless' service through a Mobile Virtual Network Operator (MVNO) agreement. Comcast could purchase Verizon Wireless' service at wholesale rates and then market and sell its own, branded wireless service in connection with our bundled offerings, creating more choice for consumers. Time Warner and Bright House Networks are also entering into Wholesale/MVNO agreements with Verizon Wireless.
Verizon is the second major carrier to announce new spectrum gains this week. Sprint said yesterday that it had signed an agreement with Clearwire that could be worth $1.6 billion, if all conditions are met, and enable Sprint to grow its 4G network services using Clearwire's WiMax network (CP: Clearwire and Sprint announce agreement worth potentially $1.6 billion).
Comcast and Time Warner are investors in Clearwire, and it has been speculated that were regulators to approve AT&T's proposed purchase of T-Mobile, Sprint — dwarfed by the deal and needing help — could look to the pair for support. Should the AT&T deal be denied, however, Reuters has reported that Comcast and Time Warner could find T-Mobile knocking on their doors.
Now, however, it's the nation's largest carrier that has called best-friend dibs on these motivated players.
"We're excited to be able to offer the nation's best wireless services to our customers and to have Verizon Wireless as a sales channel for our superb wireline services," Time Warner President and COO Rob Marcus said in a statement, adding, "We're also pleased to have obtained an attractive price for the spectrum we're selling."
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