Back to top
Read MoreHide Full Article

Leading U.S. national wireless carrier T-Mobile US Inc. (TMUS - Free Report) recently entered into an agreement with cable MSO (multi service operator) Charter Communications Inc. (CHTR - Free Report) to acquire a license of 700 MHz A Block spectrum for Eastern Montana from the latter. T-Mobile US said the spectrum will cover 600,000 POPs (point of presence) and 120,000 square miles of geographical area. However, the financial term of the contract is yet to be disclosed.

At present, 4G LTE (Long-Term Evolution) network covers 312 million POPs of T-Mobile US, of which 700 MHz LTE network covers 215 million POPs. The company expects to own 700 MHz licenses, covering 269 million POPs. Notably, in Dec 2015, T-Mobile US got the FCC’s nod to swap certain AWS-1 and PCS spectrum licenses with U.S. telecom giant Verizon Communications Inc. (VZ - Free Report) in various markets across the U.S. The deal was valued at $173 million.

In another deal, in May 2016, T-Mobile US entered into an agreement with AT&T Inc. (T - Free Report) to acquire spectrum in the 700 MHz band. This will help the company to provide LTE network in the greater Chicago area. AT&T had acquired this license as part of its takeover of Leap Wireless two years ago. Although the financial terms of the T-Mobile US-AT&T deal have been kept under wraps, the transaction is likely to be closed in the fourth quarter of 2016.

Interestingly, T-Mobile US has inked the spectrum deal with Charter Communications at a time when the cable MSO announced that it will activate its MVNO (mobile virtual network operator) agreement with Verizon, which was taken over post the acquisition of Time Warner Cable. Apart from Charter Communications, another cable MSO behemoth Comcast Corp. (CMCSA - Free Report) has also decided to offer mobile services from mid-2017 using its own WiFi network and its existing MVNO deal with Verizon.

T-Mobile US currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

More from Zacks Analyst Blog

You May Like