AT&T has agreed to acquire Straight Path Communications, a holder of spectrum licenses for 5G networks, in a deal valued at $1.6 billion, the telecommunications giant announced Monday morning.
The acquisition complements AT&T's acquisition in January of FiberTower and adds to its holdings of millimeter wave (mmWave) spectrum, AT&T said in a statement.
Millimeter wave spectrum allows for high-bandwidth transmissions, making it ideal to carry high-def video and streaming media. Several companies have been interested in the technology of late. Last year, Facebook said it achieved a broadband transmission of 20 Gbps that reached more than eight miles using the mmWave.
AT&T said the all-stock deal would accelerate the delivery of new experiences for consumers and businesses, such as virtual and augmented reality, telemedicine, autonomous cars and smart cities.
Straight Path, based in Glen Allen, Va., is a publicly traded company. Its shareholders will receive $1.25 billion, or $95.63 per share, according to AT&T.
The transaction is subject to review by the Federal Communications Commission (FCC), yet the two companies expect to close the deal within 12 months, according to the AT&T statement. Dallas-based AT&T said it would acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets.
In January, AT&T unveiled its 5G strategy for 2017, saying it would not wait for final standards for the technology to be complete to begin its "network evolution." True 5G standards are still being developed, and aren't expected to be finalized until 2019. But AT&T said in January that it had brought the timeframe for 5G standards up globally into the 2018 timeframe, meaning that it's already solving some of the latency and connectivity issues being worked out in the standards process.
The International Telecommunications Union has said theoretical peak speeds for standards-based 5G in the mmWave band can eventually reach up to 10 Gbps uploads, and up to 20 Gbps downloads, AT&T said. The carrier cautioned that user-experienced peak and average speeds will be lower than theoretical peak speeds and will vary by location and condition, such as time of day, network load, geography and devices.
In December, AT&T kicked off an enterprise trial using "5G" wireless technology, with Intel as its first customer. Two months earlier, AT&T and Ericsson conducted the first known demonstration of 5G, illustrating the possibilities of mmWave radio access technology for the networks of the future, the telecom giant said. And in February, AT&T and Nokia delivered DIRECTV NOW over a fixed wireless 5G connection using 39 GHZ mmWave technology, according to the statement.