Valuable block of spectrum could net Verizon a big profit on the sale

Verizon may be considering a sale of its 700MHz "A block" spectrum, and its no surprise that T-Mobile and AT&T are both in line to make a bid for it. Although Verizon continues to actively use the 700MHz spectrum, it has indicated previously that it would part with the valuable piece of airwaves for the right price, naturally. It purchased the rights to the A block for $2.4 billion, and has indicated that it won't part with it for less than $2.75 billion.

Reportedly both AT&T and T-Mobile are poised to bid for the spectrum. AT&T already holds the rights to adjacent 700MHz spectrum, and certainly has the cash to buy it if necessary. T-Mobile on the other hand operates its network primarily in the 1900MHz and AWS (1700/2100MHz) frequencies, and the 700MHz spectrum is undeniably more valuable than what they hold now.

AT&T isn't particularly hurting for spectrum nor has it actively indicated it needs any more. T-Mobile is a bit of a different situation. Through the sale of debt and issuance of more common stock, T-Mobile has built up about $4 billion in cash recently — specifically to pick up more spectrum. The goal of expanding its LTE network is clear, and T-Mobile seems poised to spend the cash to make it happen.

Spectrum this valuable rarely goes up for sale without at least a little competition, however, so we can expect to see a good amount of money change hands for the A block soon.

Source: WSJ