AT&T Acquiring Straight Path to Bolster Spectrum Holdings, 5G Strategy

AT&T will spend $1.6 billion to acquire Straight Path Communications, which owns a nationwide portfolio of millimeter wave wireless spectrum, including 39 GHz and 28 GHz licenses.

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AT&T added to its growing portfolio of wireless spectrum licenses and 5G expertise by acquiring Straight Path Communications in a deal valued at some $1.6 billion equal to $95.63 per share.

The acquisition, which was unveiled by AT&T on April 10, will be subject to review by the Federal Communications Commission and is expected to close sometime in the next 12 months. The deal for Straight Path follows AT&T's January acquisition of FiberTower, which holds 24 GHz and 39 GHz wireless spectrum licenses.

AT&T said in a statement that the Straight Path deal will support the company's work in 5G wireless network technology and help ramp up wireless speeds for users.

In October 2016, AT&T and Ericsson conducted a demonstration of 5G technology, illustrating the possibilities of mmWave radio access technology for the networks of the future. In February, AT&T and Nokia demonstrated how they could deliver DirecTV NOW over a fixed wireless 5G connection using 39 GHZ mmWave (millimeter wave) technology, according to AT&T.

Under the latest acquisition, AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band, covering the entire United States, including all of the top 40 markets.

Charles King, the principal analyst with Pund-IT, Inc., told eWEEK "the AT&T deal shows that the company is moving aggressively to ensure its place at the 5G table."

From a market perspective, the deal is significant because the wide range of mmWave licenses it is obtaining mean that "whenever AT&T's 5G technologies and associated media offerings are ready for prime time, it will be able to sell them into a broad, deep portfolio of commercial markets," said King.

"You could say that the AT&T/Straight Path deal is as much about real estate as it is about technology, but in the world of wireless content distribution, one is meaningless without the other," said King.

Another analyst, Rob Enderle of Enderle Group, said AT&T's latest acquisition is being made to help it keep up with its rivals. "Acquisitions like Straight Path will likely define the early skirmishes in this massive coming war [between the big four U.S. wireless carriers in the 5G race], but eventually these firms will have to make 5G actually work and here it largely remains anyone's game," he said.

Ultimately, as 5G is seen as much faster and better by wireless users, it will likely drive cell phone buyers to change carriers, said Enderle. "Both Verizon and AT&T have been pounded by T-Mobile who has been chewing up customers like the shark in Jaws.