T-Mobile ups U.S. smartphone service in Verizon deal

Reuters News
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Posted: Jun 25, 2012 10:26 AM

FRANKFURT (Reuters) - Deutsche Telekom's T-Mobile USA will buy spectrum licenses for faster new fourth-generation (4G) mobile services from Verizon to serve data-hungry smartphone users as it seeks to up its game in the United States.

T-Mobile USA has been scrambling to improve its business and stem customer losses, exacerbated by a nine-month period in 2011 when it was focused on seeking approval for a proposed $39 billion takeover by AT&T which collapsed in December.

Without disclosing financial detail of the cash and spectrum swap deal, T-Mobile USA said on Monday it will get access to 60 million people, in cities such as Detroit, Minneapolis, Philadelphia, Seattle and Washington D.C.

"This is good for T-Mobile and good for consumers because it will enable T-Mobile to compete even more vigorously with other wireless carriers," chief executive Philipp Humm said.

The deal, which needs approval by the Federal Communications Commission (FCC) and the Department of Justice, included exchanges of spectrum between the two firms and a cash payment from T-Mobile.

Following the collapse of the AT&T deal, German group Deutsche Telekom said that over the next two years, network investments at T-Mobile USA will increase by about $1.4 billion.

Over time, T-Mobile USA will spend a total $4 billion upgrading its network for high-speed wireless services based on a technology known as long term evolution (LTE).

(Reporting by Harro ten Wolde; Editing by Dan Lalor)