According to the Wall Street Journal (WSJ)’s late Monday report, with AT&T’s proposed $39 billion acquisition of T-Mobile having fallen through, the two companies have recently filed for the US Federal Communications Commission (FCC)’s approval for the transfer of $1 billion in wireless airwaves from AT&T to T-Mobile.
T-Mobile was promised the transfer of the wireless airwaves by AT&T in case the takeover bid failed to materialize; which it eventually did, after the increasing pressure from the FCC and the Department of Justice, as well as state attorneys general and rival carriers, forced AT&T to withdraw its acquisition plans.
According to AT&T, the company’s transfer of the $1 billion worth wireless spectrum to T-Mobile will come over and above its handing over of $3 billion in cash to the T-Mobile’s parent company, Deutsche Telekom AG. The cash hand-out by AT&T was part of the pre-negotiated terms which AT&T had inked with Deutsche Telekom for pulling out of the takeover agreement.
The additional spectrum is required by T-Mobile for keeping pace with its bigger rivals; more so as it currently does not have any plans for rolling out LTE – the high-speed fourth-generation mobile broadband service. Furthermore, the carrier also lost nearly 849,000 contract customers during the first nine months of 2011.
Noting that the additional spectrum from AT&T will help T-Mobile “meet the growing demand for wireless broadband services,” Tom Sugrue - T-Mobile’s Senior VP for government affairs – said in a n interview with the WSJ: “We hope the FCC will move swiftly to approve the license assignments.”