According to the AT&T, the acquisition will support its leadership in 5G, which will accelerate the delivery of new experiences for consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more.
This is one more move in a rapid focus on 5G by AT&T. In October 2016, AT&T and Ericsson conducted the first known demonstration of 5G technology, illustrating the possibilities of mmWave radio access technology for the networks of the future. And in February 2017, AT&T and Nokia reached a critical milestone, delivering DIRECTV NOW over a fixed wireless 5G connection using 39 GHZ mmWave technology.
The International Telecommunications Union has said theoretical peak speeds for standards-based 5G in the mmWave band can eventually reach up to 10 Gbps in the uplink and up to 20 Gbps in the downlink.
AT&T will 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.
The transaction has a total value of $1.6 billion which includes liabilities and amounts to be remitted to the FCC per the terms of Straight Path's January 2017 consent decree. Straight Path shareholders will receive $1.25 billion, or $95.63 per share, which will be paid using AT&T stock.
The transaction is subject to FCC review, and the two companies expect to close within 12 months.