Verizon Closes 3 Spectrum Sales - Analyst Blog
Verizon Wireless - a venture between
Vodafone Group Plc
) - announced the sale of three separate 700MHz spectrum blocks
to small rural telecommunication firms.
Verizon sold its Texas RSA 6-Jack 700 MHz lower B-block license to Muenster based Nortex Communications. The deal covers a four-county region to the northwest of Dallas. Panhandle Telecommunication Systems Inc. - that is headquartered in Guymon, Okla - purchased the Texas RSA 2-Hansford 700 MHz lower B-block license - spanning 12 counties in the northwest part of Texas. A partitioned A-Block license extending over a five-county area in the Houston market was sold to Colorado Valley Communications.
Back in August 2012, Verizon struck a deal with the Federal Communications Commission (FCC) to sell its 700 MHz Lower A and B Block spectrum in order to receive the approval for a $3.9 billion purchase of Advanced Wireless Services (AWS) spectrum from SpectrumCo - a joint venture between Comcast Corporation ( CMCSA ), Time Warner Cable and Bright House Networks.
Since then, the country's largest carrier - Verizon - has been on the lookout for prospective buyers to part with the spectrum that it was not using to gather funds for buying a big belt of the AWS spectrum. Subsequently, Verizon Wireless entered into sales agreements with seven companies that included one national company, five rural or regional carriers and one minority-owned firm. With the completion of three sales, four are still pending to be closed in the coming days.
In late January, Verizon inked a deal with AT&T Inc. ( T ) to sell its 39 lower 700 megahertz (MHz) licenses to AT&T, covering 42 million people in 18 states including major territories such as Chicago, Los Angeles and Miami. In exchange, Verizon will receive $1.9 billion and AWS spectrum licenses in five markets. The deal - pending approvals from the FCC and the Department of Justice - will likely be closed in the latter half of 2013.
We believe the sale of lower spectrum assets and the consequent purchase of new AWS spectrum will work in favor of Verizon. The company with the help of AWS spectrum holdings will be able to double its capacity, provide services at a much higher speed and expedite the Long Term Evolution (LTE) rollout, thereby driving data revenues and boosting its competitive position.
We currently, have a Zacks Rank #3 (Hold) on Verizon.
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