Mobile operator AT&T has announced it will be acquiring a broad collection of 700 MHz spectrum licenses from Qualcomm for a total of $1.925 billion in a bid to expand its capability to offer 4G mobile broadband services. The spectrum licenses cover more than 300 million people across the United States, including more than 70 million people in five of the top 15 U.S. metropolitan areas: San Francisco, New York, Boston, Los Angeles, and Philadelphia.
AT&T says it plans to employ the spectrum to deploy supplemental downlink capabilities using carrier aggregation technologies as soon as compatible network equipment and handsets are available. Qualcomm is working to integrate the appropriate technologies into its chipsets. Although it will be some time before AT&T can leverage the additional mobile bandwidth capabilities offered by the new spectrum licenses, the licenses should help AT&T keep up with the likes of Verizon Wireless—particularly if Verizon manages to get its own version of the Apple iPhone. AT&T is currently the exclusive carrier of the iPhone in the United States, and many customers in key areas like New York and San Francisco have complained bitterly about AT&T service.
Qualcomm had been using the lower 700 MHz frequencies to support its FLO TV mobile television service; however, FLO TV never really took off with consumers and Qualcomm announced plans to shut down the service in early 2011. The 700 MHz spectrum space was vacated by broadcast television when the U.S. converted to digital television broadcast; the spectrum is considered crucial to mobile broadband technologies, in part because it can better penetrate buildings than other higher-frequency technologies.
The move is AT&T’s second major spectrum license purchase in the 700MHz band: in 2007, it purchased 700 MHz licenses from Aloha Partners for about $2.5 billion in cash, in a move designed to sidestep dependence on the FCC’s then-pending 700 MHz spectrum auction.
The companies expect the deal to close in the second calendar quarter of 2011, pending regulatory approval.
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