AT&T said Monday it will acquire Qualcomm wireless spectrum licenses for $1.92 billion in a move that will give it more capacity for 4G services.
Specifically, AT&T is buying Qualcomm's wireless spectrum licenses in the lower 700 Mhz frequency band. Qualcomm initially acquired the spectrum for its Flo TV operations. However, Qualcomm will shut down Flo TV in March 2011. Since Qualcomm didn't need the spectrum it was more than willing to unload it to AT&T, which needs to bolster its network. Verizon Wireless has launched 4G services already and will have about a one-year lead on AT&T.
Indeed, the Qualcomm spectrum is valuable and covers more than 300 million people and 70 million in top markets like New York and San Francisco. AT&T has been working to improve coverage in those two big markets.
So what's AT&T's plan? In a statement, the wireless giant said:
As part of its longer-term 4G network plans, AT&T intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology. This technology is designed to deliver substantial capacity gains and is expected to be enabled with the completion of 3GPP Release 10. AT&T expects to begin deploying this spectrum once compatible handsets and network equipment are developed.
Here's AT&T's current 4G roadmap from an earnings conference call in October:
For its part, Qualcomm said it will integrate this carrier aggregation technology in its chipsets. AT&T will then deploy Qualcomm's chipset. Qualcomm's big plan is to "develop LTE multicast technologies" that can support video and multimedia content on mobile networks.