In a turn of events that must put more pressure on AT&T (T), Verizon Communications (VZ) this morning said it will spend $3.6 billion to purchase wireless spectrum from Comcast (CMCSA), Time Warner Cable (TWC), and privately held Bright House Networks.
The spectrum, covering 259 million potential users, or POPs, across the U.S., was licensed by the three companies under the guise of “SpectrumCo,” a holding company, back in September of 2006 in an FCC auction.
The holding company paid approximately $2.4 billion at the time, hence, today’s sale marks a roughly 50% return on investment.
The deal also involves both sides becoming “agents to sell one another’s products,” with the prospect that the cable companies may sell Verizon’s wireless service on a wholesale basis.
Comcast CEO Neil Smit said the deal would give his company the ability to offer mobility to its cable customers. Verizon Wireless CEO Dan Mead said the spectrum would enhance the company’s ability to offer the so-called Long Term Evolution, or LTE, form of 4G wireless service.
Verizon shares are up 16 cents, or 0.4%, at $37.93 in early trading. Comcast shares are up 78 cents, or 3.5%, at $23.35.
And AT&T shares are up 6 cents at $28.90.
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