That AT&T (NYSE:T, news, filings) is looking for more spectrum is about as secret that McDonald’s sells hamburgers. And so, the announcement yesterday that they have agreed to buy some, the largest being from NextWave Wireless, wasn’t exactly a big surprise.
NextWave has been sitting on a pile of unused spectrum for years, waiting rather longer than it probably expected for just such a day to arrive. AT&T will be paying up to $600M to gain most of NextWave’s cache of AWS and WCS spectrum, with a few Canadian and US odds and ends still remaining with NextWave’s debt holders. NextWave has made a business out of squatting on spectrum while making transparently unlikely plans to actually use it for more than a decade.
Meanwhile, AT&T will also pick up some spectrum from Comcast and Horizon Wi-Com. Put it all together, and it will give AT&T’s LTE plans some breathing room, although there seems to be some regulatory work left to do before they can actually use the WCS spectrum. Now that the aftermath of the T-MobileUSA deal debacle is dissipating, it seems likely that the FCC will work with them on that though.
But in the end, adding spectrum can only ever be a short to mid term solution because the laws of physics mean you can allocate only what is already there. You can add all the fiber you want though, so smaller and smaller cells fed by more and more fiber will have to be the endgame at some point. But for now, wireless spectrum will be the name of the game.
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