Metro PCS 2007 Annual Report Download - page 118

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2007, 2006 and 2005
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by the FCC; however, the FCC rules provide for renewal. Such renewals generally are granted routinely without
substantial cost.
On May 11, 2005, the Company completed the sale of a 10 MHz portion of its 30 MHz PCS license in the
San Francisco-Oakland-San Jose, California basic trading area for cash consideration of $230.0 million. The sale
was structured as a like-kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended,
through which the Company’ s right, title and interest in and to the divested spectrum was exchanged for the
spectrum acquired in Dallas/Ft. Worth, Texas and Detroit, Michigan through a license purchase agreement for an
aggregate purchase price of $230.0 million. The purchase of the spectrum in Dallas/Ft. Worth and Detroit was
accomplished in two steps with the first step of the exchange occurring on February 23, 2005 and the second step
occurring on May 11, 2005 when the Company consummated the sale of 10 MHz of spectrum for the San Francisco-
Oakland-San Jose basic trading area. The sale of spectrum resulted in a gain on disposal of asset in the amount of
$228.2 million.
On July 7, 2005, the Company acquired a 10 MHz F-Block PCS license for Grayson and Fannin counties in the
basic trading area of Sherman-Denison, Texas for an aggregate purchase price of $0.9 million.
On August 12, 2005, the Company closed on the purchase of a 10 MHz F-Block PCS license in the basic trading
area of Bakersfield, California for an aggregate purchase price of $4.0 million.
On December 21, 2005, the FCC granted Royal Street Communications 10 MHz of spectrum in the Los Angeles,
California; Orlando, Lakeland-Winter Haven, Jacksonville, Melbourne-Titusville, and Gainesville, Florida basic
trading areas. Royal Street Communications, as the high bidder in Auction No. 58, had previously paid
approximately $294.0 million to the FCC for these PCS licenses.
On November 29, 2006, the Company was granted AWS licenses as a result of FCC Auction 66, for a total
aggregate purchase price of approximately $1.4 billion. These new licenses cover six of the 25 largest metropolitan
areas in the United States. The east coast expansion opportunities include, but are not limited to, the entire east coast
corridor from Philadelphia to Boston, including New York City, as well as the entire states of New York, New
Jersey, Connecticut and Massachusetts. In the western United States, the new expansion opportunities include the
San Diego, Portland, Seattle and Las Vegas metropolitan areas. The balance supplements or expands the geographic
boundaries of the Company’ s existing operations in Dallas/Ft. Worth, Detroit, Los Angeles, San Francisco and
Sacramento.
On February 21, 2007, the FCC granted the Company’ s applications for the renewal of its 14 C-Block PCS
licenses acquired in the FCC auction in May 1996, as well as the applications for the renewal of certain other
licenses subsequently acquired from other carriers.
Jacksonville Acquisition
On December 21, 2007, the Company executed an agreement with PTA Communications, Inc. (“PTA”) to
purchase 10 MHz of PCS spectrum from PTA for the basic trading area of Jacksonville, Florida. The Company also
entered into agreements with NTCH, Inc. (dba Cleartalk PCS) and PTA-FLA, Inc. for the purchase of their
customers and certain of their assets used in providing PCS wireless telecommunications services in the Jacksonville
market. Consummation of both acquisitions is conditioned on customary closing conditions and the license purchase
agreement also requires approval by the FCC. On January 17, 2008, the Company closed on the acquisition of
certain assets used in providing PCS wireless services.