AT&T Consents to Acquire NextWave Wireless Inc

AT&T, one of the leaders in telecommunication services, has consented to purchase NextWave Wireless Inc.  The company NextWave has licenses in the Advanced Wireless Service (AWS) and Wireless Communication Services (WCS) bands.

It was in the year 1997 that the WCS spectrum was auctioned for the first time, but it has never been used for wireless Internet applications, owing to the technical regulations that are devised to stop probable interference to the satellite radio users in the nearby spectrum bands.

Sirius XM and AT&T filed a mutual proposal with Federal Communications Commission (FCC) that would safeguard the nearby satellite radio spectrum from hindrance, thus enabling the WCS spectrum to be used for wireless internet services for the first time. The solution that was thus proposed on WCS spectrum is still being reviewed by the FCC and it creates the much-required new spectrum capacity effectively.

AT&T stated that the proposed WCS regulation changes and acquisition of NextWave indicate another way to create extra wireless mobile capacity to assist support the soaring up of usage of wireless data on tablets and smartphones. If it gets approved, the proposal will help AT&T to start the preliminary deployment of the WCS spectrum for extra 4G LTE capacity in roughly 3 years.

As per the agreement terms, AT&T will get all NextWave’s equity for around $25 million. Moreover, there will be another agreement with the debt holders of NextWave, according to which all the outstanding debt of the company will be retired by NextWave or obtained by AT&T for a sum of $600 million cash. The unpaid debt held by the bondholders of NextWave will be satisfied through transferring chosen NextWave assets and cash. The debt holders of NextWave have also agreed to these terms and most of its shareholders also have agreed to provide support of this transaction.

This transaction is subject to the review that would be given by FCC and to other such customary closing clauses. Moreover, the asset transfers of NextWave may be subject to Federal Trade Commission and Department of Justice’s Hart-Scott-Rodino review. AT&T is looking forward to conclude this transaction before 2012 comes to an end.

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