AT&T agrees to buy Straight Path in $1.6bn deal
Straight Path holds spectrum licenses in 28GHz and 39GHz bands, both earmarked for 5G technology
AT&T has announced a deal to buy one of the largest holders of spectrum earmarked for 5G in the US for $1.6 billion.
The US operator will acquire Straight Path, which owns rights in the 28GHz and 39HGz spectrum band, for almost three-times the market value of its stock.
The all-stock deal will see AT&T buy Straight Path for $95.63. Its shares closed at $36.48 on Friday, according to reports in the US.
The deal will be subject to approval from the Federal Communications Commission, and follows an investigation from the FCC into Straight Path which was concluded in January. That investigation saw the company agree to pay the regulator 20% of the proceeds of any sale of its licenses, after it failed to put the licenses to use.
According to Fortune, an AT&T spokesperson said the operator is paying "a fair price for the spectrum that we're acquiring," spectrum that will help its bid to position itself as a leader in 5G technology.
AT&T has already announced a number of 5G trials, including the first known demonstration of 5G tech with Ericsson in October, and broadcasting DIRECTV NOW over a fixed 5G network with Nokia in February.
US operators, including AT&T and major rival Verizon, are desperately trying to deploy 5G quicker than the estimated 2020 deployment date, but have been hindered by a shortage of spectrum. This has led AT&T to switch of its 2G network earlier this year, in order to redeploy the bandwidth.
As part of the deal, AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets.
AT&T said it expects the acquisition, the latest deal it has announced after striking an agreement to buy Time Warner last year, to close within 12 months subject to regulatory approval.