negotiationAT&T said today that it plans to acquire Straight Path Communications in a $1.6 billion deal. Straight Path’s primary assets are spectrum licenses in bands suitable for 5G deployment. The AT&T Straight Path purchase will bring those licenses – in the 39 GHz and 28 GHz bands – into the AT&T fold.

Straight Path calls itself an “intangible asset monetization company” specializing in “maximizing the value of assets such as microwave bandwidth licenses.” Earlier this year, Straight Path reached a $100 million spectrum squatting settlement with the FCC, which industry observers said would pave the way for a spectrum sale to a network operator.

According to an AT&T press release, the carrier will acquire 735 licenses in the 39 GHz band and 133 licenses in the 28 GHz band. The licenses cover the entire country, including all of the top 40 markets, AT&T said. The deal is expected to close in about a year.

Driving the AT&T Straight Path Purchase
AT&T isn’t the first carrier to purchase another company just to get its 5G licenses. Verizon made a similar move when it announced plans last year to acquire XO Communications, primarily to get that company’s licenses in the 28 GHz band.  That deal closed in February.

The FCC plans to auction spectrum suitable for 5G in the 28 GHz, 37 GHz and 39 GHz bands, but that process will take longer than carriers appear to want to wait.  In an increasingly competitive wireless market, the nation’s top two wireless carriers AT&T and Verizon increasingly see their networks as critical differentiators.

Financial details of the AT&T Straight Path purchase can be found in the AT&T  and Straight Path  press releases.