The 700 MHz licenses to be acquired by AT&T cover 42 million people in 18 states — California, Colorado, Florida, Idaho, Illinois, Louisiana, Montana, New Mexico, New York, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington and Wyoming. Here are the following CMAs (Cellular Market Areas):
· California: Los Angeles
· Colorado: Park, Fort Collins-Loveland, Pueblo,
· Florida: Miami, West Palm Beach, Bradenton
· Idaho: Butte
· Illinois: Chicago
· Louisiana: De Soto, Claiborne, Morehouse, Lake Charles, Alexandria
· Montana: Billings, Beaverhead, Great Falls, Carbon
· New Mexico: Grant
· New York: Rochester
· Ohio: Cincinnati, Youngstown
· Oklahoma: Oklahoma City
· South Dakota: Rapid City, Harding
· Tennessee: Memphis
· Texas: Texarkana, Edwards, Waco, Tyler, Longview-Marshall
· Utah: Box-Elder, Carbon, Beaver, Piute
· Virginia: Frederick
· Washington: Okanogan
· Wyoming: Sheridan, Casper
Yet another interesting sideline is the involvement of a Sarasota, FL private equity firm, Grain Management. Verizon is selling spectrum in several North Carolina markets to Grain Management. Grain is also acquiring an AWS license covering Dallas from AT&T—and Verizon will lease that license from Grain.
Recall in Auction 73, the Lower 700 Band was up for grabs.
How did Verizon do?
- Block A – Verizon Wireless and U.S. Cellular both bought 25 licenses each. In this block, Verizon targeted urban areas, while U.S. Cellular bought licenses primarily in the northern portion of the U.S.
- Block B – AT&T Mobility was the biggest buyer in the B block, with 227 licenses totaling $6.6 billion. U.S. Cellular and Verizon bought 127 and 77 licenses, respectively. AT&T Mobility and Verizon Wireless bought licenses around the country, while U.S. Cellular continued with its strategy to buy licenses in northern regions.
- Block C – Of the 10 licenses in the C Block, Verizon Wireless bought the 7 that cover the contiguous 48 states (and Hawaii). Those seven licenses cost Verizon roughly $4.7 Billion.
Why? It's a win-win because Verizon Wireless wanted to unload the 700 MHz bands (A and B Block) as its C Block and its recent AWS spectrum acquired from Cable Company partners gave a sufficient footprint nationally. AT&T needed it to fill B Block holes nationally. It was almost a given that AT&T would be the buyer. As an aside, earlier this month, Verizon sold some A Block licenses to US Cellular.
The interesting go-between of a private equity firm is notable. It's clear that PE firms do not operate networks but a licensing/leasing arrangement from these big carriers will bring in recurring revenue.