August 2, 2012
AT&T Wants To Buy NextWave Wireless
Lee Rannals for redOrbit.com - Your Universe Online
NextWave was granted Wireless Communication Services (WCS) and Advanced Wireless Service (AWS) spectrum, and it has submitted a request to FCC to begin using WCS airwaves for mobile data.
“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 company said in a statement on Thursday.
The FCC previously had concerns that using WCS spectrum for wireless might interfere with satellite radio broadcasts. The agency is looking over the spectrum request made by AT&T and Sirius XM back in June to free up some unused spectrum.
In the deal, AT&T will pay $25 million for NextWave's equity, along with a contingent payment of about $25 million. The wireless company will also either settle or retire any outstanding NextWave debt, which makes the total buyout at about $600 million.
The FCC still has to approve the acquisition, and AT&T warns that the FTC and Department of Justice might want to have a look at the asset transfer as well. AT&T hopes to close the deal by the end of the year.
As congestion grows due to the expanded use of wireless devices like smartphones and tablets, companies are racing to try and gain more spectrum.
“WCS spectrum was first auctioned in 1997, but has not been utilized for mobile Internet usage due to technical rules designed to avoid possible interference to satellite radio users in adjacent spectrum bands,” AT&T said in the statement.
It said that the Sirius proposal would "effectively" help open up "much-needed new spectrum capacity."
The company expects to complete the deal by the end of the year, assuming that government regulators do not decide against it.