US authority The Federal Communication Commission (FCC) has approved the transfer of $1bn worth of radio spectrum from AT&T to T-Mobile USA as part of the break-up fee owed following AT&T’s failed $39bn takeover bid.

This transfer provides T-Mobile with a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets.

The USA’s number two operator AT&T is also obliged to give $3bn cash to its fourth-placed rival after the firms agreed to abandon the merger due strong opposition from regulators and competitors.

T-Mobile USA said it plans to use the spectrum to help it upgrade its network for higher-speed data services and has committed to spend $4bn on network modernisation to improve existing voice and data coverage, and to deploy LTE in 2013. The operator added that it will need more AWS spectrum to support its 4G evolution efforts and the continued growth in mobile data services.

“We applaud the FCC for acting swiftly to approve the transfer of these spectrum licenses,” said Neville Ray, CTO at T-Mobile USA. “Securing this additional spectrum was a key catalyst for our plans to launch LTE in 2013 and is therefore good news for our customers.”