By Daniel Eran Dilger

Published: 07:00 PM EST (04:00 PM PST)

AT&T has filed for FCC approval to transfer wireless spectrum worth $1 billion to T-Mobile as a result of the failure of its $39 billion effort to acquire the smaller mobile carrier.

Along with the spectrum, AT&T will give T-Mobile's German owner Deutsche Telekom $3 billion in cash as part of its pre-negotiated terms for backing out of the acquisition, which was quashed by the US Justice Department and the FCC as threatening competition in the wireless market.

According to a report by the Wall Street Journal, Tom Sugrue, T-Mobile’s senior vice president for government affairs said "this additional spectrum will help meet the growing demand for wireless broadband services."

T-Mobile is the only carrier among the US' top 4 to have not articulated any plans for rolling out LTE 4G service, and is also hampered by its use of non-standard UMTS 3G service. That prevents the carrier from selling Apple's existing iPhone, which it has cited as a key reason for its poor performance.

T-Mobile has previously indicated that new chipsets could enable future iPhone models to support the company's existing 3G service. Without building out LTE however, T-Mobile could likely be left behind as support for the new networking standard begins to trickle into the mainstream.

Both T-Mobile and AT&T have referred to their existing HSPA+ networks as 4G, because they can offer data speeds compatible to LTE. However, LTE has future potential well beyond HSPA+.



Apple is expected to release an iPhone model capable of supporting LTE later this year. It has not previously supported LTE until now because of technical issues involving battery life and size.

Last April, Apple's chief executive Tim Cook explained in a conference call, "the first generation of LTE chipsets force a lot of design compromises with the handset, and some of those we are just not willing to make."