AT&T acquiring Straight Path to support 5G rollout

The deal gives AT&T access to a nationwide portfolio of millimeter wave (mmWave) spectrum.

(Image: AT&T)

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.

VIDEO: Nokia to deploy Europe's first nationwide 10G fiber network

Starman and Nokia to deploy Europe's first nationwide 10G fiber network

Special Feature

Next Generation Networks

The rising tides of big data, video, and cloud computing are driving tremendous demand for faster and more efficient networks. We delve into how things like software-defined networks (SDN) and new wireless technologies are enabling business transformation.

Read More