The move will increase Verizon Wireless’s capacity in existing markets and expand its network into new markets. The companies have also signed an agreement allowing Leap customers to roam on Verizon Wireless’s network.
Verizon Wireless is acquiring 23 spectrum licenses covering a population of 8 million people in 20 markets in Michigan, Wisconsin, Arkansas, Mississippi, Alabama, and New York. Several of the licenses are in markets where Verizon Wireless already has licenses, and will be used to expand capacity to meet growing demand for voice and data services.
Under the agreement, San Diego, California-based Leap Wireless will transfer its operations and approximately 25,000 customers in Michigan to Verizon Wireless. The transaction is expected to close around the middle of 2005, and is subject to federal regulatory approval.
Bedminster, New Jersey-based Verizon Wireless is the second largest mobile operator in the US, with 43.8 million customers. Over the past year, it has been on something of an acquisition spree. Last November it acquired the PCS spectrum licenses owned by NextWave Telecom for $3bn. The 10- and 20-megahertz licenses were in the valuable 1.9 gigahertz PCS frequency range, and covered a population of 73 million people.
Last July it won the spectrum license for the New York metropolitan area auctioned by NextWave. Under terms of the deal, Verizon Wireless paid $930m for the license. The 10 MHz license is in the 1.9 GHz PCS frequency range and covers a population of 20.1 million people in New York City and northern and central New Jersey, as well as Westchester and Rockland counties.
Earlier in July, Verizon Wireless also paid $418m for the wireless assets of Qwest Communications International. That deal added spectrum in 62 markets, in 14 western and mid-western states, including cities such as Denver, Phoenix, Seattle, and Salt Lake City.
