Verizon Wireless in $3.6-billion spectrum deal with cable giants
Verizon Wireless has struck a deal to buy licenses for wireless communications spectrum from SpectrumCo, a joint venture owned by Comcast Corp., Time Warner Cable and Bright House Networks, for $3.6 billion.
The deal, announced Friday morning, is for wireless spectrum that has the potential to reach about 259 million people, and will require approval from government regulators. It is seen as a sign that the cable companies are not eager to spend billions of dollars on their own on a wireless strategy.
"This sale of spectrum is an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage," the companies said in a statement.
Miller Tabak & Co. analyst David C. Joyce said the sale is evidence that the "cable industry tacitly acknowledges that they cannot do wireless on their own."
As part of the deal, the parent companies of SpectrumCo and Verizon Wireless agreed to sell each others' products. Also, the companies have formed a venture to develop new technology for wireless communications.
"Spectrum is the raw material on which wireless networks are built, and buying the [Advanced Wireless Services] spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers," said Verizon Wireless President Dan Mead.
Comcast, the biggest stakeholder in SpectrumCo, will take in $2.3 billion from the sale. Time Warner Cable will get $1.1 billion, and Bright House will receive $189 million.
-- Joe Flint
Photo: Verizon Wireless sign. Credit: Seth Wenig / Associated Press.