News by Dan Seifert on Wednesday November 30, 2011.
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Verizon Wireless and Leap Wireless, parent of Cricket, have applied for a significant exchange of spectrum between the two companies. The spectrum swap, if approved by the Federal Communications Commission, would give Leap the ability to launch 4G LTE service in the Chicago area, while allowing Verizon to strengthen its 3G CDMA and 4G LTE coverage in other parts of the country.
Leap will give Verizon a spectrum license that covers about 18.7 million residents, and Verizon will give Leap some Chicago area licenses that cover about 11 million residents. Leap already owns about 10MHz of the 700MHz spectrum block in the Chicago area, and the 12MHz that it would gain from Verizon would be enough to allow it to deploy LTE services on the 700MHz bands. Verizon's own LTE coverage in Chicago uses a different area of the 700MHz block, so it would not be affected by the exchange with Leap.
In return, Verizon will get licenses for both PCS and AWS spectrum across the country. Verizon currently uses PCS bands for its 3G CDMA service, and though it does not use AWS at all right now, it has said that it plans to supplement its 700MHz LTE coverage with AWS spectrum, much in the same way that AT&T plans to use AWS that it could acquire through its planned purchase of T-Mobile. Verizon argues that it needs the extra spectrum to keep up with the demand for mobile data from users, in spite of the fact that it already owns more spectrum than competing carriers.
The two carriers say that the swap should be approved because the population covered is relatively small and the licenses involved in the transaction have yet to be built out extensively. The financials behind the deal have not been disclosed, but these types of transactions usually involve millions of dollars (Verizon paid $142 million for the 12MHz in Chicago when the FCC auctioned it off in 2008, for example). [via Fierce Wireless]
Dan is MobileBurn.com's Editor-in-Chief. Based in Poughkeepsie in New York, Dan can be found on Twitter as @DCSeifert.