T-Mobile US has announced it will pick up $3.3 billion of wireless airwave licenses from Verizon Wireless to improve its high-speed network.
Shares in T-Mobile rose 2.5 per cent following the announcement, with the company saying it will pay Verizon Wireless $2.365 billion cash and give it $950 million worth of spectrum.
In a bid to catch up with rival services and demand for wireless airwaves rising sharply in the US, the move shows T-Mobile’s intent on leaving behind its discounts system to bring it up to speed with rivals AT&T and Verizon Wireless.
T-Mobile, the fourth largest US mobile provider, also said that it hopes to buy additional spectrum in government auctions at the end of 2014 and in 2015.
"It’s still a priority to get additional spectrum," Chief Technology Officer Neville Ray told analysts on a conference call to discuss the deal.
T-Mobile managed to raise $3.8 billion in stock and bond sales in November to fund spectrum purchases.
The deal is expected to close mid-2014.
T-Mobile rose 89 cents to $33.17 on the New York Stock Exchange after the news. Verizon shares bumped up 3 cents to $48.45.
