T-Mobile US Inc., the fourth-largest U.S. wireless carrier, has agreed to buy spectrum, or wireless capacity, from Verizon Wireless for about $2.4 billion in cash as part of an airwave swap that will give both companies more capacity where they need it, Bloomberg reported.
The deal will provide T-Mobile with a large swath of low-band frequencies in nine of the top 10 markets across the United States, and Verizon with airwaves that will relieve Internet congestion in cities such as New York.
Analysts say the transaction will also make T-Mobile more attractive as a takeover target.
U.S. wireless companies are fighting for spectrum to keep up with the massive growth of Internet usage. Read a November 2011 Business Record story for more information on the issue.
AT&T Inc. attempted to acquire T-Mobile back in 2011 to gain more of the company's spectrum for its network. AT&T withdrew the attempt after the Federal Communications Commission and others expressed concerns that the merger would lead to antitrust issues. But advocates, including former Congressman Rick Boucher in a trip to Des Moines, pushed for the merger, and similar types of deals, as a way to encourage private investment into the system to keep up with growth.