Regional wireless provider MetroPCS Inc. has reportedly agreed to sell 10 megahertz of spectrum in the San Francisco Basic Trading Area to Verizon Wireless for $230 million. The carriers also signed a nationwide roaming agreement that will allow MetroPCS to expand its regional offering, according to Raymond James & Associates.
The deal is expected to be structured in a way as to reduce tax liabilities related to MetroPCS’ previously announced plans to acquire spectrum from Cingular Wireless L.L.C. covering Detroit and Dallas for $230 million.
MetroPCS’ spectrum sale provides Verizon Wireless with 10 megahertz of spectrum in the 1.9 GHz spectrum band to go with its 25 megahertz of spectrum in the 800 MHz band in the San Francisco area and could solve reported spectrum shortages the carrier is facing in attempting to roll out its high-speed CDMA2000 1x EV-DO wireless data services in Northern California. Raymond James added that a similar deal for spectrum covering Sacramento, Calif., could follow because both carriers have current spectrum positions similar to San Francisco.
In addition to tax benefits from the sale, MetroPCS gets a 10-year initial term roaming agreement with Verizon Wireless covering most of the nationwide operator’s markets. Verizon Wireless has the ability to terminate the agreement if MetroPCS is acquired by a competitor. The roaming agreement would allow MetroPCS to expand its flat-rate, unlimited calling service from its current markets in Atlanta, Miami, San Francisco and Sacramento by providing customers with roaming capabilities. MetroPCS also recently announced plans to expand its service to most of Florida and won a handful of spectrum licenses during the Federal Communications Commission’s Auction 58 covering Florida and Los Angeles.
Leap Wireless International Inc., which offers its similar Cricket service in 39 markets across the country, has said it is looking at offering similar roaming capabilities to its customers as a way to better compete against nationwide operators.
