Date: Tuesday, April 11th, 2017, 05:58
Category: Finance, iPhone, News, wireless
It never hurts to buy the bandwidth you need in advance.
AT&T on Monday announced that it will acquire Straight Path Communications, a company that holds licenses to airwaves needed for the next-generation network technology. AT&T announced the deal in a press release, noting that it is worth $1.6 billion in total.
Straight Path Communications is one of the largest holders of the 28GHz and 39GHz millimeter wave spectrum used by wireless carriers. It also holds the mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band, which 5G technology is heavily reliant upon.
During the press release, AT&T explained that the Straight Path spectrum it has acquired as part of this deal covers the entire United States. The company also noted that the theoretical peak speeds in mmWave band can reach up to 10 Gbps up and 20Gbps down.
AT&T also noted that shareholders will receive $1.25 billion, while the rest of the $1.6 billion comes as liabilities and amounts to be remitted to the FCC.
Last year, AT&T announced that it had begun testing 5G, the company touting speeds 10 times to 100 times faster than LTE. The carrier has also laid out its broader “5G Evolution” plans, going head to head with Verizon in its goals.
The press release reads as follows:
DALLAS, April 10, 2017 /PRNewswire/ — AT&T* has announced plans to acquire Straight Path Communications which holds a nationwide portfolio of millimeter wave (mmWave) spectrum, including 39 GHz and 28 GHz licenses. This acquisition complements AT&T’s January acquisition of FiberTower and augments the company’s holdings of mmWave spectrum.
The acquisition will support AT&T’s leadership in 5G, which will accelerate the delivery of new experiences for consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more.
The International Telecommunications Union has said theoretical peak speeds for standards-based 5G in the mmWave band can eventually reach up to 10 Gbps in the uplink and up to 20 Gbps in the downlink.**
In October 2016, AT&T and Ericsson conducted the first known demonstration of 5G technology, illustrating the possibilities of mmWave radio access technology for the networks of the future. And in February 2017, AT&T and Nokia reached a critical milestone, delivering DIRECTV NOW over a fixed wireless 5G connection using 39 GHZ mmWave technology.
AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets.
The transaction has a total value of $1.6 billion which includes liabilities and amounts to be remitted to the FCC per the terms of Straight Path’s January 2017 consent decree. Straight Path shareholders will receive $1.25 billion, or $95.63 per share, which will be paid using AT&T stock.
The transaction is subject to FCC review, and the two companies expect to close within 12 months.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
**User experienced peak and average speeds will be lower than theoretical peak speeds and will vary by location and condition (time of day, network load, geography, devices, etc.
Stay tuned for additional details as they become available.