In the wireless war over smartphone subscribers, Apple‘s iPhone has proven to be an invaluable weapon. AT&T‘s initial and risky bet to carry the device sight unseen paid off in spades, as Ma Bell started scooping up lucrative smartphone users en masse. Verizon Wireless took note and once it became an iPhone carrier, it promptly began to outpace its smaller rival in smartphone subscriber growth.

Yesterday, T-Mobile finally became an official iPhone carrier, making Apple’s device available on all four of the largest domestic wireless carriers. Before that, the iPhone and T-Mobile were kept apart due to technical spectrum incompatibilities that relegated the iPhone to 2G data speeds for unlocked device users.

Source: T-Mobile.

As it turns out, both AT&T and Verizon played a part in facilitating their smaller rival getting Apple’s flagship — at long last making the T-Mobile iPhone a reality.

Ma Bell’s consolation prize
It seems like just yesterday that AT&T failed in its attempt to acquire T-Mobile, but that was nearly two years ago at this point. It was a jaw-dropping $39 billion deal when it was initially announced in 2011, one that would be heavily scrutinized and eventually vetoed by regulators, since the No. 2 and No. 4 players in the industry joining forces to take down the No. 1 had important and potentially negative implications on the overall competitive landscape.

That’s a stark contrast to regulator stance on T-Mobile’s proposed merger with MetroPCS , which amounts to the No. 4 and No. 5 players pairing up to put more competitive heat on the top three. Regulatory bodies have chosen not to object and will forever hold their peace regarding the union, so long as shareholders nod in approval.

The consolation prize for the failed acquisition included a $3 billion breakup fee from AT&T, made payable to T-Mobile parent Deutsche Telekom, and a negligible roaming agreement, but more importantly the smaller carrier also received Advanced Wireless Service, or AWS, spectrum licenses in 128 markets from Ma Bell.

Big Red’s big red heart
Fast forward six months and T-Mobile would separately ink a spectrum agreement with Verizon, purchasing or exchanging additional AWS licenses in 218 markets throughout the country. That greatly benefited T-Mobile’s spectrum position by allowing the carrier create more contiguous blocks of spectrum and realign its airwave holdings in adjacent markets. That boosted T-Mobile’s data performance and throughput speeds in numerous key markets, and was all made possible by the swap with Verizon.

Naturally, Verizon didn’t agree to the swap out of the kindness of its big red heart. Big Red had been looking to purchase a 20 MHz block of AWS spectrum for $3.9 billion from a handful of cable companies and was getting mean looks from regulators. The AWS swap helped pave the way for Verizon’s larger deal, even if it helped beef up T-Mobile’s network in the process.

The net result of all of this was that …read more
Source: FULL ARTICLE at DailyFinance