Verizon Wireless will spend $315
million to buy wireless spectrum from Cox Communications that will enable the
carrier to expand its 4G capabilities while giving Cox’s customers access to
Verizon’s massive wireless network.
Under terms of the deal announced Dec.
16, Verizon will buy Cox’s 20MHz Advanced Wireless Services (AWS) spectrum
licenses, which cover 28 million people. At the time, both companies can sell
each other’s products and services to consumer and commercial customers through
their sales channels, and Cox eventually may be able to sell Verizon services
wholesale.
The agreement is similar to the one
Verizon made Dec. 12, when it entered into an agreement with a company called
SpectrumCo—a joint venture between Comcast, Time Warner Cable and Bright House
Networks—in which Verizon bought 122 AWS spectrum covering 259 million people
for $3.6 billion. As with the Cox deal, Verizon and SpectrumCo also announced
joint agreements where the cable companies and Verizon can sell one another’s
products, and the cable companies over time may be able to sell Verizon
services wholesale.
Cox officials said they now expect to
work with the companies involved in SpectrumCo, with any agreements designed to
better integrate wireline and wireless products and services.
At the time of the SpectrumCo deal,
Verizon Wireless President and CEO Dan Mead said the agreement would mean
better wireless service for many customers.
“Spectrum is the raw material on which
wireless networks are built, and buying the AWS spectrum now solidifies our
network leadership into the future, and will enable us to bring even better 4G
LTE [Long-Term Evolution] products and services to our customers,” Mead said in
a statement.
Cox President Pat Esser said such
benefits will now come to his customers.
“These agreements provide Cox customers
with key enablers to mobility, such as access to Verizon Wireless' 4G LTE
network and iconic wireless devices," Esser said in a statement.
The deal not only is the latest example
of the drive by Verizon and rival wireless carriers to rapidly grow their
networks, but also the decision by cable companies to not pursue building their
own wireless networks. Over the past couple of years, Cox—the country’s third
largest cable company with more than 6 million residential and commercial customers—made
steps to build out a wireless network on the spectrum it owned. However, Cox
earlier this year announced it was ending those plans, choosing instead to use
Sprint Nextel’s network.
In November, Cox took another step,
ditching that idea and essentially telling customers they had until March 2012
to find another wireless provider. Cox’s wireless service will run through
March 30, 2012. The deal with Verizon Wireless will need approval of the
Federal Communications Commission.
Verizon on Dec. 15 brought 4G LTE
service to 11 new markets—including Dover, Del.; Fitchburg/Leominster, Mass.;
Poughkeepsie, N.Y.; and Youngstown, Ohio—and expanded service in San Francisco;
Washington D.C.; Savannah, Ga.; Chicagoland, Ill.; and Baltimore and
Hagerstown, Md. That will mean Verizon is offering 4G LTE wireless service to
more than 200 million people in 190 markets in the United States, the company
said.
“Introducing the 4G LTE network has
been the fastest rollout of any next-generation network in our history. In one
year and 10 days, we have brought 4G LTE to more than 200 million people,”
Verizon CTO David Small said in a statement. “That’s more than twice as fast as
our 3G network rollout.”
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