Verizon (VZ.US) increases 5G layout and will spend $1 billion to purchase US Cellular spectrum assets

The Zhitong Finance App learned that Verizon Communications (VZ.US), the largest wireless service operator in the US, will acquire some spectrum licenses under US Cellular Corp at a price of 1 billion US dollars, because the latter communications tower operator is continuously divesting assets related to its spectrum products.

US Cellular Corp said in an official statement on Friday that the deal and agreements with two other mobile network operators depend on whether the transaction announced in May to sell part of the wireless business and part of the spectrum assets to T-Mobile US Inc.

This news comes at a time when US wireless communication service companies such as Verizon are paying more attention to their core 5G communications business. Last month, Verizon sold leases for thousands of microwave communication towers in a deal. But at the same time, Verizon obtained an important condition through this deal, that is, it can rent back the required tower capacity and continue to use the infrastructure of these communication towers. It's a leaseback capacity arrangement that allows Verizon to continue using these towers without completely losing their right to use them.

As early as May, US Cellular announced a planned deal with T-Mobile, another US wireless communications service giant, amounting to $4.4 billion, including cash and debt.

According to the statement, privately held US Cellular controls one of the largest communications tower businesses in the US. If all of these deals are closed, it will still hold some of the spectrum assets and continue to “seek opportunities to monetize these reserved core assets.”

Spectrum is currently the core resource for wireless communication networks and determines the network speed and coverage that operators can provide. By purchasing US Cellular spectrum, Verizon will be able to further expand its wireless network capacity and signal coverage in the US market in the future, especially in regions where network performance needs to be enhanced, which is important for improving the quality and user experience of 5G mobile services.

With the rapid development of 5G network technology, wireless service operators' demand for spectrum has increased dramatically, especially C-band and millimeter wave spectrum. These spectrum assets can support faster data transmission speeds and greater network capacity.

Verizon's main competitors, particularly T-Mobile, have enhanced their network coverage through numerous mergers and acquisitions and spectrum purchases in recent years. In order to maintain its advantage in the competitive situation of 5G network services, Verizon needs to improve network quality and service capabilities by increasing spectrum resources.