AT&T acquiring Straight Path to support 5G rollout
AT&T announced Monday that it's acquiring Straight Path, a company with a nationwide portfolio of millimeter wave (mmWave) spectrum that can help AT&T roll out a 5G network.
The deal is valued at $1.6 billion, AT&T said, including liabilities and scheduled remittances to the Federal Communications Commission (FCC). It's expected to close within six months. Straight Path shareholders will receive $1.25 billion, or $95.63 per share, paid using AT&T stock. That's far above the stock's Friday closing price of $36.48.
While 5G networks are still in development, it's expected to a huge market. According to Ericsson, the 5G business will be worth $1.2 trillion by 2026.
This summer, AT&T should start rolling out so-called 5G "evolution markets" in Austin and Indianapolis. Verizon, meanwhile, will be testing its own 5G pre-commercial services in 11 markets across the US this year.
Specifically, the Straight Path acquisition gives AT&T access to 735 mmWave licenses in the 39GHz band and 133 licenses in the 28GHz band. The acquisition follows AT&T's January purchase of FiberTower, another company with high frequency spectrum.
Just last year, the FCC began opening up frequencies above 24GHz for 5G -- a move the FCC called a "game-changer" that would bring fiber-like capacity to wireless users. Under current international requirements, 5G networks must be capable of downlink peak data rates of 20Gbps and uplink peak data rates of 10Gbps.
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