8-KOther Events

T-Mobile US, Inc. 8-K Report, Corporate Update (Mar 26, 2008)

Filed March 26, 2008For Securities:TMUSTMUSZTMUSITMUSL

Summary

This 8-K filing reports that MetroPCS Communications, Inc. (now T-Mobile US, Inc.) was the high bidder in the FCC's Auction No. 73 for wireless spectrum in the 700 MHz band. Specifically, the company's subsidiary, MetroPCS 700 MHz, LLC, secured the 12 MHz Lower Band Block A license for the Boston-Worcester Economic Area for approximately $313 million. This new spectrum acquisition supplements existing spectrum held by the company in the same region and is expected to be funded through existing cash reserves and operational cash flows. The company is obligated to make a final payment of approximately $160 million by April 17, 2008. The filing also notes that the license grant is subject to FCC approval and operational use is restricted until February 2009 due to incumbent television licenses, with further operational rules applicable thereafter.

Key Highlights

  • 1MetroPCS was the high bidder for a 700 MHz band wireless spectrum license (Lower Band Block A) in the Boston-Worcester Economic Area.
  • 2The acquired license covers 12 MHz of spectrum and was secured through a wholly-owned subsidiary, MetroPCS 700 MHz, LLC, in FCC Auction No. 73.
  • 3The aggregate purchase price for the license is approximately $313 million.
  • 4A final payment of approximately $160 million is due to the FCC by April 17, 2008, to complete the purchase.
  • 5The company believes existing cash and anticipated cash flows from operations are sufficient to cover the remaining payment and operational needs.
  • 6The grant of the license is contingent on FCC application approval.
  • 7Usage of the 700 MHz license is subject to FCC rules, including interference protection for incumbent television licenses until February 17, 2009.

Frequently Asked Questions

The primary purpose of this filing was to inform investors that MetroPCS Communications, Inc. (TMUS) was the successful high bidder in FCC Auction No. 73 for a specific wireless spectrum license in the Boston-Worcester Economic Area.

The aggregate purchase price for the 12 MHz Lower Band Block A license in the 700 MHz band was approximately $313 million. Of this amount, approximately $160 million remains to be paid by April 17, 2008.

The company stated its belief that its existing unrestricted cash and cash equivalents, along with anticipated cash flows from operations, will be sufficient to cover the remaining payment for the spectrum license and meet ongoing business needs.

Yes, the grant of the license is subject to FCC application approval. Furthermore, there are operational restrictions: the license cannot interfere with existing analog and digital television licenses until February 17, 2009, and specific FCC operating rules apply thereafter to minimize interference with digital television reception.