Verizon Wireless Agrees to Buy NextWave Spectrum Licenses
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November 5, 2004 8:14 a.m.
Verizon Wireless said it agreed to buy NextWave Telecom Inc.'s radio-wave spectrum licenses for $3 billion.
The licenses, in 23 markets around the U.S., will be acquired through the purchase of NextWave Telecom following the completion of its bankruptcy reorganization, when it will own no assets other than the licenses, said Verizon Wireless, which is based in Bedminster, N.J. The purchase is expected to close by mid-2005, it said.
The two sides have been in on-and-off discussions about such a transaction for months. The licenses, which cover 73 million people. will be used to expand Verizon Wireless's network capacity in markets including New York, Boston, Washington, D.C., and Los Angeles, the company said.
The transaction is subject to approval by the U.S. Bankruptcy Court and the Federal Communications Commission, as well as antitrust regulatory review, the company said.
Verizon Wireless – a joint venture of Verizon Communications and Vodafone Group PLC – needs spectrum because it is the U.S.'s fastest growing wireless carrier. It also is in the midst of an extensive upgrade to its network to enable it to sell higher-speed wireless-data services, which will require more spectrum.
In July, NextWave received court approval to sell its New York metropolitan spectrum licenses to Verizon Wireless for $930 million and certain spectrum licenses in Florida to MetroPCS Inc. for $43.5 million.
NextWave, based in Washington, D.C., won nearly $5 billion in radio-wave spectrum licenses at a Federal Communications Commission auction in 1996, but the company filed for Chapter 11 protection in 1998. The FCC eventually took possession of the licenses and re-auctioned them. But after wireless carriers bid again on the licenses, led by Verizon Wireless, the Supreme Court ruled that the FCC improperly had reclaimed the licenses, putting them back in NextWave's possession.
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