T-Mobile buys US Cellular spectrum for $308 million

T-Mobile US has paid $308 million to US Cellular for a swathe of spectrum that will allow it to provide 4G services in the Mississippi Valley region.

The deal with US Cellular (Chicago, IL, USA) gives T-Mobile (Bellevue, WA, USA) – the fourth-biggest operator in the US – some 10MHz of Advanced Wireless Services (AWS) spectrum covering about 32 million people across 29 markets, including St Louis, Nashville, Kansas City, Memphis, Lexington, Little Rock-North Little Rock, Birmingham, New Orleans and Louisville.

T-Mobile US has paid $308 million to US Cellular for a swathe of spectrum that will allow it to provide 4G services in the Mississippi Valley region.

The deal with US Cellular (Chicago, IL, USA) gives T-Mobile (Bellevue, WA, USA) – the fourth-biggest operator in the US – some 10MHz of Advanced Wireless Services (AWS) spectrum covering about 32 million people across 29 markets, including St Louis, Nashville, Kansas City, Memphis, Lexington, Little Rock-North Little Rock, Birmingham, New Orleans and Louisville.

Following the deal, T-Mobile says it plans to extend the coverage of its 4G LTE network to new areas and provide even higher-speed services in places where it is already available.

“In today’s marketplace, spectrum is gold,” said John Legere, the chief executive of T-Mobile. “This is a rare opportunity to secure precious AWS spectrum in key markets that will immediately be put to use by both T-Mobile and MetroPCS customers.”

T-Mobile says its high-profile merger with MetroPCS (Richardson, TX, USA) – completed in May – has already freed up spectrum for use with LTE services as it migrates MetroPCS customers over to its infrastructure.

The operator is playing catch-up with bigger rivals AT&T (Dallas, TX, USA) and Verizon Wireless (New York City, NY, USA) on LTE rollout and is eager to build up its spectrum assets so that it can take full advantage of LTE’s high-speed capabilities.

In Las Vegas, where it has already combined MetroPCS spectrum with its own, T-Mobile says it provides the fastest 4G download speeds of any operator in the city, citing independent third-party tests to back up its claim.

The operator has also launched a range of no-contract, low-price tariffs in an effort to turn around its flagging smartphone business.

AT&T and Verizon, however, have quickly responded to its new challenge, unveiling no-contract deals of their own.

Meanwhile, Sprint (Overland Park, KS, USA) – the country’s third-biggest operator – is likely to become a much bigger threat if deals with SoftBank (Tokyo, Japan) and Clearwire (Bellevue, CA, USA) go through.

Sprint’s shareholders have already approved the sale of 78% of the operator to SoftBank for a fee of $21.6 billion, while Clearwire’s board has advised its own shareholders to back Sprint’s $5-a-share offer for the 49.2% of the mobile broadband company it does not already own.

SoftBank’s expertise and cash resources could reinvigorate Sprint, while Clearwire’s vast spectrum holdings would allow it to accelerate its own rollout of LTE technology.

T-Mobile’s acquisition of US Cellular spectrum still requires sign-off by the Federal Communications Commission and Department of Justice, but the operator expects the deal to close in the final quarter of the year.