AT&T on Thursday announced an agreement worth up to $600 million to acquire NextWave Wireless Inc. in a deal aimed at beefing up its spectrum portfolio.
AT&T has agreed to acquire all NextWave's equity for $25 million plus make another payment for the same amount if certain conditions met. Most of the money, though, will be used to pay off NextWave's debtholders. AT&T plans to pay off debtholders through cash and by transferring certain NextWave assets.
U.S. wireless carriers have been making moves to increase their spectrum portfolios due to the burgeoning demand for wireless services on smartphones, tablet computers and other devices.
NextWave holds licenses to spectrum that hasn't been deployed due to technical rules, AT&T said.
AT&T noted the Federal Communications Commission is reviewing a proposed solution that would protect from interference radio spectrum that is adjacent to Wireless Communications Services (WCS) spectrum. If the proposed solution filed by AT&T and Sirius XM is approved, WCS spectrum could be used for mobile Internet service, AT&T said. NextWave also holds licenses in the Advanced Wireless Service (AWS) bands.
"If approved, the proposal will enable AT&T to begin initial deployment of WCS spectrum for added 4G LTE capacity, in approximately three years," the telecommunications giant said.
Dallas-based AT&T anticipating closing its acquisition of NextWave Wireless by the end of the year following regulatory reviews and other closing conditions.
The acquisition will exclude certain assets, including NextWave's Canadian WCS spectrum. San Diego-based NextWave said the Canadian spectrum and its 2.5 MHz EBS/BRS spectrum assets would be held by a new holding company at the time of the acquisition.