Following the discovery of a lump of coal in its stocking earlier this week, AT&T (T) managed to get at least one present it was hoping for: Qualcomm’s 700 MHz spectrum.
AT&T announced late last night that it had garnered regulatory approval to purchase 700 MHz licenses from Qualcomm (QCOM) that was originally announced one year ago. The approval follows the announcement earlier this week that AT&T was pulling out of its planned $39 billion acquisition of T-Mobile USA due to regulatory objections. That deal’s demise will cost AT&T approximately $4 billion in assets.
The Qualcomm deal calls for AT&T to pick up 6 megahertz of nationwide, 700 MHz unpaired spectrum (D-Block) and 6 megahertz of unpaired 700 MHz spectrum (E-Block) covering approximately 70 million potential customers for $1.925 billion. Qualcomm had originally spent $558 million for those licenses during the 700 MHz auction.
It should be noted that the remainder of the E-Block licenses are owned by Dish Network, which has recently made news about its own plans to enter the mobile space in some form.
AT&T has said it plans to use the spectrum to supplement downlink transmissions of its LTE network using spectrum aggregation technology that will be included in future versions of the LTE standard. AT&T Mobility’s current LTE network is using the carrier’s paired 700 MHz spectrum assets picked up in the 2008 government auction.
AT&T’s 700 MHz spectrum plans began in early 2008 when the company closed on a $2.5 billion acquisition of Aloha Partners’ 12 megahertz of spectrum covering 196 million people in 281 markets, including the top 10 markets in the United States and 72 of the top 100 markets. That deal proceeded AT&T picking up 227 B-Block licenses that contained 12 megahertz of paired spectrum for $6.64 billion during the government’s 700 MHz auction. AT&T announced earlier this year plans to purchase a half-dozen 12 megahertz B-Block licenses in the 700 MHz band from Whidbey Telephone for an undisclosed amount.
Qualcomm was using that spectrum for its MediaFLO mobile television service that it shuttered earlier this year.
The Qualcomm deal was eventually combined with AT&T’s attempt to acquire T-Mobile USA by government regulators, which many felt was the reason the T-Mobile USA deal garnered such intense scrutiny.
“This is a surprising and positive announcement,” noted Wells Fargo Securities in a research note. “Recent speculation has been that the FCC would apply increased scrutiny to this acquisition following AT&T’s withdrawal of its merger application from the FCC.”
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