Under pressure to acquire more spectrum for its booming but network-strained mobile phone service, AT&T said it will acquire a large swath of 700-MHz bandwidth from Qualcomm for $1.925 billion. The spectrum was freed when Qualcomm decided to shut down its FLO TV service.
The spectrum will cover more than 300 million people across the United States. The bandwidth consists of 12 MHz of Lower 700-MHz D and E block spectrum covering more than 70 million people in top U.S. metropolitan areas including Boston, Los Angeles, New York, Philadelphia, and San Francisco. More than 230 million people in many remaining parts of the United States will be covered by 6 MHz of lower 700-MHz D block spectrum.
AT&T said it plans to deploy the spectrum by working with Qualcomm to integrate carrier aggregation technology. The carrier expects to begin deploying the spectrum once compatible handsets and network equipment have been developed. Qualcomm added that it intends to integrate the technology into its chipset roadmap and then to market the technology globally.
"Carrier aggregation, supplemental downlink, and [Long-Term Evolution] LTE multicast technologies are an exciting evolution of next generation wireless systems to economically support increasing consumer demand for mobile TV and other rich media content," said Qualcomm chairman and CEO Paul Jacobs in a statement.
Carrier aggregation, which leads to increased network capacity gains, involves enabling unpaired spectrum for use in conjunction with paired spectrum. Qualcomm added that the technology, which is new, is expected to be utilized in global carrier markets where unpaired spectrum bands can operate in conjunction with paired spectrum.
The Qualcomm-AT&T transaction is expected to close in the second half of 2011 after regulatory approvals and other customary closing conditions are met.