MetroPCS sells San Fran spectrum to Verizon, inks nationwide roaming deal

[TNDan21]

MetroPCS sells San Fran spectrum to Verizon, inks nationwide roaming deal
By Dan Meyer
Mar 2, 2005

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.

MetroPCS sells San Fran spectrum to Verizon, inks nationwide roaming deal

[danny boi]

Looks like a win win situation for both providers.

[Fathead]

People who want EV-DO in the bay area will be giddy over this.

[agentHibby]

Ok, I did not know that Metro PCS has the full 30 MHz in San Francisco.

There is alot of pending apps on this license already changing the license to Royal Street Communications, LLC

So the C Block will be split to C3, C4, C5 Verizon gets one and Metro PCS keeps the other two.

It will be intresting to see what the future Metro PCS plans will be with Verizon cheap roaming.

[RJB]

I wish I had the much money

[larry]

It will be interesting to see how Metro PCS plans to use their recently acquired spectrum in Los Angeles. There's no way they can build out a new network on their own here. Impossible.

[Airb330]

Originally Posted by larry

It will be interesting to see how Metro PCS plans to use their recently acquired spectrum in Los Angeles. There's no way they can build out a new network on their own here. Impossible.

Well they might just throw up 50 towers along the highway and call it a day. I am assuming they could get sites at least on the highways...? They do seem to have poor coverage in all of their cities.

[larry]

Yes they could get a few towers up on the highways but most residential areas have much stricter policies on allowing cell sites now. It took Sprint a good 6 years to build out this market (with easier zoning regulations) so I know it would take Metro even longer. I doubt they would want to spend that much time and invest that much money into this market without getting any return for years and years. The number of cell sites required to provide good service for this market is unbelievable.

[Fathead]

Do you think they're just holding it to resell later on, larry?

[larry]

No I think they will sign a resale agreement with Sprint and piggyback on their network, sort of like what T-Mobile did with Cingular here. Or something similar.

[Airb330]

Maybe Metro PCS will piggyback off of Verizon PCS signals only. I'm not sure how they are setting up the EVDO network, but I know it's PCS only. Maybe they can split some of that off for MPCS, though I bet it would get clogged fast.

[larry]

That's also a possibilty. Metro will wind up making some kind of a deal with either Sprint or Verizon in the Los Angeles area.

[ZaphodB]

The sheer size of the Los Angeles market is an impassable barrier to any newcomer. Even if the NIMBY's weren't in full sway here, it would be impossible. You'd have to have thousands of towers.

[larry]

Originally Posted by ZaphodB

The sheer size of the Los Angeles market is an impassable barrier to any newcomer. Even if the NIMBY's weren't in full sway here, it would be impossible. You'd have to have thousands of towers.

Yep and with today's today's zoning delays and much higher lease payments it makes it even more impossible. The cost of each tower can now run well over $200K.