ATandT Buys Spectrum from Qualcomm for Planned 4G LTE Network

AT&T took a step closer to its planned deployment of a 4G LTE (long-term evolution) network Dec. 20 by agreeing to purchase spectrum licenses in the lower 700MHz frequency band from Qualcomm for $1.93 billion. AT&T said in a statement that it plans to deploy the spectrum as “supplemental downlink using carrier aggregation technology,” and that the move will bolster its ability to “provide an advanced 4G mobile broadband experience for its customers in the years ahead.”
The spectrum currently covers more than 300 million people nationwide-more than 70 million of whom are in such major markets as New York, Boston, Philadelphia, Los Angeles and San Francisco. Qualcomm currently uses the licenses to support its FLO TV business, which the company says it will reevaluate and probably shut down in March.
“This technology is designed to deliver substantial capacity gains and is expected to be enabled with the completion of 3GPP [3rd Generation Partnership Project] Release 10,” AT&T said in the statement, adding that it “expects to begin deploying this spectrum once compatible handsets and network equipment are developed.”
In a separate statement, Qualcomm said that it will integrate the carrier aggregation technology into its chipset roadmap and sell the technology worldwide. The technology enables wireless operators to use unpaired spectrum bands in conjunction with existing paired bands, to make “substantial” improvements to their mobile broadband networks.
“This is a positive outcome for Qualcomm and our stakeholders,” Paul Jacobs, chairman and CEO of Qualcomm, said in the statement. “Carrier aggregation, supplemental downlink and LTE multicast technologies are an exciting evolution of next-generation wireless systems to economically support increasing consumer demand for mobile TV and other rich media content.”
AT&T is currently upgrading its HSPA 7.2 network to HSPA+ technology, before rolling out LTE in 2011. For now, it’s the only top-four U.S. carrier not offering access to 4G technology. Sprint offers WiMAX-based 4G through Clearwire, which it owns a majority share of, and has lately enjoyed some unprecedented success, thanks to the two smartphones-the HTC Evo 4G and Samsung Epic 4G-that it offers to take advantage of it 4G coverage areas.
In early November, T-Mobile launched an ad campaign branding it “America’s Largest 4G Network” and introducing a 4G-enabled smartphone, the myTouch 4G, as well as the 4G-enabled Dell Inspiron Mini 10 netbook. While the network is based on HSPA+, T-Mobile CEO Neville Ray has said that it offers speeds that “match and often beat WiMAX and are readily comparable to what early LTE will deliver.”
Following in early December, Verizon Wireless-the nation’s largest network, which is widely expected to gain the additional burden on its network of supporting an iPhone early in 2011-switched on its LTE-based 4G network. Currently covering 38 cities and 60 commercial airports, executives have described the effort as “just the beginning.”
(Highlighting just how close to the beginning it is, within days customers were experiencing problems with the hand-off between 3G and 4G-an issue Verizon acknowledged and is presumably working to remedy.)
The deal between Qualcomm and AT&T is still subject to regulatory approvals and other closing conditions, but the pair said they anticipate that the sale will officially close during the second half of 2011.