AT&T has announced plans to buy NextWave Wireless, hoping to use the company's WCS and AWS spectrum licenses to increase its own 4G LTE coverage. NextWave was granted Wireless Communication Services (WCS) and Advanced Wireless Service (AWS) spectrum some time ago, but if the FCC approves a June submission requesting approval to begin using WCS airwaves for mobile data, those holdings could become invaluable to AT&T.
The combination of the NextWave acquisition and the FCC rule changes "represent an alternative approach to creating additional wireless network capacity to help support skyrocketing wireless data usage on smartphones and tablets" AT&T said in a statement today. "If approved, the proposal will enable AT&T to begin initial deployment of WCS spectrum for added 4G LTE capacity, in approximately three years."
That's still a big "if", given the FCC is still looking over the spectrum request made by both AT&T and Sirius XM. Previously, the FCC had concerns that using WCS spectrum for wireless broadband might interfere with satellite radio broadcasts in adjacent bands.
AT&T will pay $25m for NextWave's equity, along with a contingent payment of around $25m; it will also settle or retire any outstanding NextWave debt, for a total of $600m in cash. Outstanding debt will be settled by a combination of cash or NextWave asset transfers, and AT&T claims "a majority" of shareholders are happy with the agreement.
The FCC will still have 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 part of the deal too. Still, it hopes to close by the end of the year.