AT&T announced today that it has agreed to acquire NextWave Wireless. The price is $25 million, plus a contingent payment of up to an additional $25 million.
Through a separate agreement, AT&T will also acquire NextWave’s debt for a total of about $600 million.
NextWave holds a significant wireless spectrum portfolio in the United States and Canada, which will become AT&T’s, should the deal go through. AT&T gives a little background on events that led to the purchase:
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.
In June, AT&T and Sirius XM filed a joint proposal with the FCC that would protect the adjacent satellite radio spectrum from interference and enable WCS spectrum — for the first time — to be used for mobile Internet service. This proposed solution on WCS spectrum, which is still under review by the FCC, effectively creates much-needed new spectrum capacity.
According to AT&T, the proposed WCS rule changes and NextWave acquisition represent an “alternative approach to creating additional wireless network capacity to help support skyrocketing wireless data usage on smartphones and tablets.”
Of course, the deal must go through FCC review, and other customer closing conditions. AT&T will be able to begin initial deployment of WCS spectrum for added 4G LTE capacity, in about three years, if the deal is approved.