T-Mobile Buys Cingular Out of Joint Spectrum
By Eric Lin, Tue May 25 20:15:00 GMT 2004
With expectations of Cingular's purchase of AT&T, T-Mobile and Cingular are going their separate ways, divying up shared networks.
T-Mobile and Cingular entered into a joint venture in 2001 to give each operator better coverage. T-Mobile would share its GSM infrastructure in New York City, and in return Cingular would share its buildout in California and Nevada as well as jointly erect more sites out West. Now as part of Cingular's buyout of AT&T Wireless, T-Mobile will buy the shared spectrum from Cingular for $2.3 billion, although Cingular will still maintain some bandwidth and the two have also penned a kinder gentler roaming agreement as part of the deal.
Despite AT&T's buildout there, T-Mobile will give up 10 mHz of spectrum in New York City to Cingular. T-Mobile will also buy the shared network in California and Nevada as well as 10 mHz of Cingular's own spectrum in San Francisco, Sacramento and Las Vegas with the option to purchase bandwidth in Los Angeles and San Diego.
Cingular will get to buy bandwidth on these networks from T-Mobile wholesale until it can straighten out how it can integrate AT&T's network. Cingular currently has the strongest GSM network in California and Nevada since it started there as a GSM carrier. Combining Cingular's metro area coverage (which they get to keep for the most part) as well as AT&T buildout in California should result in an equally strong network for Cingular, but there will be road bumps to integrating it all, no doubt. T-Mobile also feels good about their resulting network, hoping it helps add additional customers in a market they joined late.