United States —
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.
Millimeter wave spectrum is expected to play a large role in 5G networks. Both AT&T and rival Verizon Communications Inc have been conducting 5G trials. Verizon is testing a 5G fixed wireless service with equipment maker Ericsson in 11 markets in the U.S. and expects a commercial launch as early as 2018. Meanwhile, AT&T said earlier this year that it had successfully completed tests with Nokia that delivered its streaming video service DirecTV Now over a 5G connection using millimeter wave technology.
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.