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."