January 25, 2013
Just one day after AT&T (NYSE: T ) announced its quarterly earnings, the telecom company reported today that it has agreed to buy spectrum from Verizon (NYSE: VZ ) for $1.9 billion and spectrum licenses in five markets.
The all-cash transaction equates to 48% of AT&T's 2011 net profit, and will allow AT&T to expand its wireless broadband capacity (notably 4G LTE services) to 42 million people in 18 states across the West, Midwest, and South.
This newest acquisition represents a significant step toward AT&T's goal to reach 300 million Americans with 4G LTE by 2015. During AT&T's quarterly conference call yesterday, Chairman and CEO Randall Stephenson noted, "Looking ahead, our key growth platforms -- mobile data, U-verse and strategic business services -- all have good momentum with a lot of headroom. We're off to a strong start executing Project VIP, our plan to expand our high-growth platforms to millions more customers, and our 4G LTE network deployment is ahead of schedule, delivering outstanding performance."
Verizon also said it has agreed to sell block licenses covering the Charlotte, Greensboro and Raleigh-Durham markets in North Carolina to Grain Management, a Sarasota, Fla.-based private equity firm that invests in the telecommunications sector, for $189 million.
Pending regulatory approval, the AT&T deal is expected to close in the second half of 2013.