Verizon Wireless and T-Mobile Monday agreed to a wireless spectrum swap that both companies say is mutually beneficial. What does all this mean for consumers?
T-Mobile would get more spectrum than Verizon in the deal, and would pay an undisclosed sum in return. But the exchange will only happen if regulators approve Verizon's plan to purchase massive amounts of unlicensed spectrum from cable companies, which are abandoning their wireless ambitions and from Leap, a wireless holding company. Verizon's willingness to help out spectrum-starved T-Mobile could appease regulators.
Some of the answers for consumers are straightforward, and others, not so much.
More Coverage for Verizon, T-Mobile
Verizon and T-Mobile both say their customers will get better wireless coverage out of the deal. For Verizon, the swap would provide deeper and more contiguous coverage across many eastern U.S. markets, and would provide more Advanced Wireless Services spectrum--used for voice and data by certain smartphones--in 17 western U.S. markets.
T-Mobile says the extra spectrum will provide a boost in 15 of the top 25 U.S. markets, particularly Detroit, Philadelphia, Seattle, and Washington, D.C., the Associated Press reports. T-Mobile needs the extra spectrum as it tries to build a 4G LTE network that can compete with AT&T, Sprint, and Verizon.
Unclear Outcome for Smaller Competitors
T-Mobile previously opposed Verizon's planned spectrum purchase and banded together with smaller carriers and advocacy groups to speak out against it. T-Mobile argued then that the deal would reduce competition. Presumably, T-Mobile is placated now. But what about other smaller carriers?
RCA, a group that represents rural and regional carriers, said in a press release that it's “pleased a competitive carrier may get access to additional spectrum.” The group notes that T-Mobile is “more than willing to discuss” access to certain parts of the spectrum for other smaller carriers, so customers of regional or rural carriers may get better coverage out of the Verizon deal as well. However, the specifics are unclear.
But RCA is still worried about interoperability and data roaming. As DSL Reports has noted, RCA wants regulators to impose conditions on the Verizon deal that would make the entire 700-MHz frequency band interoperable, allowing customers of rural carriers to roam more freely. With T-Mobile out of the fight, RCA may have more trouble pushing that agenda.