T-Mobile USA inks spectrum deal with Verizon to expand 4G coverage to 60m more people

T-Mobile USA and Verizon Wireless have reached an agreement for the purchase and exchange of key Advanced Wireless Services (AWS) spectrum licenses in 218 markets across the US.

We previously reported that T-Mobile USA lost more than 700,000 post-paid customers during the final quarter of 2011, as its rivals’ ability to sell the iPhone 4S cuts into its subscriber base.

The carrier did give out positive news earlier this year, however, as it revealed it is planning to launch an LTE network in 2013 as part of what it called “a major network modernization plan.” T-Mobile USA has been marketing what are essentially 3.5G services as 4G for some time, and as we said at the time, it’s set to become the final major US carrier to announce plans for 4G.

Its $4bn 4G network evolution plan includes modernization of 37,000 cell sites, launching 4G HSPA+ services in the 1900 MHz band and deployment of LTE throughout next year.

So, with T-Mobile already committing to a 4G rollout, expanding its networks to compete with competitors, this latest announcement certainly fits these plans. And it could also mean they finally get access to the iPhone further down the line.

This hook-up with Verizon looks set to improve T-Mobile’s spectrum position in 15 of the top 25 US markets by letting them acquire additional AWS spectrum.

Following regulatory approval, this spectrum can be deployed to improve the company’s 4G mobile broadband service, including the rollout of LTE service next year. Some of the spectrum T-Mobile is acquiring in this transaction include licenses that Verizon is purchasing from SpectrumCo, Cox and Leap. Therefore, this agreement will depend somewhat on the closing of those deals.

“This agreement will provide T-Mobile with critical AWS spectrum, enhancing both network capacity and performance and allowing us to meet the growing consumer demand for 4G mobile broadband,” T-Mobile CEO and President Philipp Humm said. “This is good for T-Mobile and good for consumers because it will enable T-Mobile to compete even more vigorously with other wireless carriers. We anticipate FCC approval later this summer, in time for us to incorporate this new spectrum into our network modernization and the rollout of LTE services next year.”

So, both sides ARE gaining spectrum with this deal, but it seems T-Mobile stands to benefit more. T-Mobile will gain spectrum covering 60 million people — notably in Philadelphia, Washington, DC, Detroit, Minneapolis, Seattle and Cleveland. Full financial terms of the agreement are not being disclosed, but Verizon will receive spectrum covering 22 million people…and cash, of course.