Verizon plans to bolster its 4G network after closing a $3.6 billion spectrum deal with Comcast and Time Warner Cable, in a move to bring faster service to smartphones and tablets.
The Basking Ridge, N.J.-based carrier, which purchased 122 spectrum licenses from Comcast and Time Warner Cable, now has the ability to continue to expand its wireless network.
"Spectrum is the raw material on which wireless networks are built, and buying the Advance Wireless Service's spectrum now solidifies our network leadership into the future," said Verizon Wireless CEO Dan Mead. "[It] will enable us to bring even better 4G LTE products and service to our customers."
A cross-resale agreement is also part of the deal. The cable companies involved in AWS can resell Verizon-branded service, while the carrier's retail stores will sell cable services.
The purchase is a huge boost for Verizon as the company attempts to continue to build out its LTE network and stay ahead of its competitors. AT&T is in the process of rolling out its 4G LTE network, but the second largest carrier in the U.S. is already lagging behind Verizon's LTE network and plans to boost its own efforts appear to be in doubt.
AT&T's proposed $39 billion acquisition with T-Mobile was supposed to be the carrier's primary resource for the expansion of its LTE service. However, the FCC's recent findings about the merger and AT&T's lawsuit with the Department of Justice may lead to a collapse of the deal.
Sprint inked a deal with high-speed wireless company Clearwire, which will build out its 4G network and let Sprint receive unlimited access to Clearwire's WiMax 4G network over the next two years. The carrier also lags behind Verizon in the mounting 4G race.
As smartphone use continues to grow and customers use more data, the carrier with the most spectrum will likely be able to offer the best speeds, luring more customers. Carriers lacking the pivotal raw material will be unable to offer the same quality of service as their competition, putting them at a distinct disadvantage in the wireless market.
Verizon's deal with the cable companies may have cost the carrier a hefty sum today, but it will likely pay tremendous dividends in the future.
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