The alleged deal may be announced next week and would see Verizon sell off some of its 700 MHz spectrum to T-Mobile. The spectrum would help T-Mobile reach a larger customer base, as it will cover an area that reaches about 150 million people. The spectrum should help T-Mobile greatly expand its LTE network.
In exchange for the spectrum Verizon may ask for about $3 billion. The carrier paid $2.6 billion for the A block 700 MHz spectrum at a government auction back in 2008.
Verizon may also receive so-called AWS spectrum from T-Mobile that it can use to bolster its LTE network in large cities. The carrier has recently invested heavily in improving its network in cities such as New York to help alleviate network congestion issues.
Any deal between the two carriers is subject to Federal Communications Commission approval.
This reported deal comes shortly after the FCC delayed an auction of spectrum in the 600 MHz range that T-Mobile and Sprint (S)
Neither Verizon nor T-Mobile were available for comment.
TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERIZON COMMUNICATIONS INC (VZ) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."