Why T-Mobile (TMUS) Is Gaining Today

NEW YORK (TheStreet) -- T-Mobile (TMUS) announced Monday it will buy spectrum in the 700 MHz A-Block from Verizon (VZ) for $2.365 billion in cash and AWS and PCS spectrum licenses.

Shares of T-Mobile rose 1.5% to $32.76, and Verizon shares fell 0.2% to $48.33 following the announcement.

The deal will give T-Mobile low-band spectrum in nine of the top 10 and 21 of the top 30 markets in the U.S. Low-band spectrum is better for in-building coverage and can travel greater distances, making it useful for more rural areas. The 700 MHz spectrum should help the carrier expand and improve its current LTE network.

The 700 MHz spectrum is reportedly vulnerable to interference from TV operators, which may cause problems for the carrier. Verizon previously purchased the spectrum for $2.4 billion, but never used it as part of its network.

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