AT&T to Buy Spectrum From Verizon in $1.9 Billion Deal
Just one day after AT&Tannounced its quarterly earnings, the telecom company reported today that it has agreed to buy spectrum from Verizon 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.
The article AT&T to Buy Spectrum From Verizon in $1.9 Billion Deal originally appeared on Fool.com.
Fool contributor Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
