UScellular is selling a portion of its spectrum to Verizon for $1 billion, as the carrier company is looking to optimize its resources and focus on core operations. This is the second time that the carrier company is selling its spectrum assets to another carrier.
For starters, spectrums are essentially a range of electromagnetic frequencies that are used to transmit data wirelessly. All of your wireless communications—whether it"s your mobile carrier, FM radio, or your home WiFi, all have an assigned spectrum range. When a company sells its spectrum assets, the licensing is determined on the basis of megahertz per population (MHz POPs or MHz/pop), where MHz is the frequency or bandwidth of the spectrum, while population (POP) is the number of people served by that bandwidth, equating to bandwidth per person.
As part of the deal, UScellular will be selling 663 million MHz POPs of its Cellular (850 MHz) spectrum licenses. It also includes 11 million MHz POPs from AWS (Advanced Wireless Services) and 19 million MHz POPs from PCS (Personal Communications Service) licenses.
All of this equals to a total of $1 billion, which will be paid by Verizon, in an all-cash deal.
Earlier this year, US Cellular also sold its wireless operations and some more spectrum assets to T-Mobile for around $4.4 billion. UScellular says that it wants to retain focus on its core operations, especially in rural areas while selling off other assets.
Laurent C. Therivel, President and CEO of UScellular, said in a statement:
"We are pleased that significant value for a portion of the remaining licenses will be realized and, importantly, that these agreements with multiple mobile network operators ensure that this spectrum will be put to work for consumers throughout the country. We are continuing the process to opportunistically monetize the remaining spectrum assets not included in today"s announcement."
What"s left with UScellular would be about 3.4 billion MHz POPs of low and mid-band spectrum and 17.2 billion MHz POPs of mmWave spectrum, while the company is planning to continue exploring ways it can monetize these assets further.