MobileMonday Global

^{Gaining company’s spectrum} Verizon Wireless buys all NextWave for USD 3B

Verizon Wireless has signed an agreement to purchase all of NextWave Telecom Inc.'s spectrum licenses covering 73 million potential customers in 23 markets for USD 3 billion. The acquisition, which is scheduled to close by the middle of next year, will be made through the purchase of NextWave Telecom following the completion of NextWave's bankruptcy reorganization. Covered in the deal are both 10-megahertz and 20-megahertz licenses in the 1.9 GHz spectrum band that NextWave originally gained control over during the Federal Communications Commission's spectrum auctions in the mid-1990. The spectrum become subject to numerous court cases following NextWave's bankruptcy filing shortly after the original auctions. The licenses include 20 megahertz of spectrum in a number of top markets such as New York, Boston, Baltimore and Washington, D.C.. Also 10 megahertz of spectrum is included in Denver, Detroit, Los Angeles and Philadelphia. The purchase price of USD 2.85 per megahertz per pop was more than what Cingular Wireless paid in its USD 1.4 billion purchase of 34 licenses from NextWave, but well below the USD 4.63 per megahertz per pop Verizon paid in auction for 10 megahertz of spectrum in New York from NextWave. Verizon Wireless plans to use the additional capacity to enhance its network as well as expand its footprint into new markets. As part of the deal NextWave will pay the FCC USD 71 million to the federal government as under the terms of the Global Resolution Agreement signed between the two parties in April. According to the NextWave statement all creditors will be paid in full, and existing shareholders will receive a distribution of cash and interest in the newly formed operating company.

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