AT&T agrees to buy spectrum from its biggest rival, Verizon, for $1.9 billion
By GARY JACOBSON
Capped by a $1.9 billion deal Friday with its main rival, this was the biggest week for wireless spectrum news at AT&T Inc. since it abandoned its $39 billion takeover bid for T-Mobile USA in late 2011.
On Tuesday, the Dallas-based company said it had agreed to acquire Alltel’s remaining U.S. operations covering 4.6 million people in six states from Atlantic Tele-Network for $780 million.
At the time, AT&T said it had signed about 40 spectrum deals in the past year and characterized them as “opportunistic” acquisitions in “secondary” markets. Spectrum — the wireless frequencies that facilitate mobile communication — is the lifeblood of that industry.
On Thursday, CEO Randall Stephenson told investors that AT&T had increased its national spectrum holdings by a third in the past year through nearly 50 transactions, achieving a top corporate goal.
And Friday, AT&T said it had agreed to acquire spectrum covering 42 million people in 18 states from Verizon Wireless, the nation’s leading provider, which is divesting some spectrum after a deal with cable companies.
AT&T declined to explain the spectrum acquisitions in more detail. Instead, a spokeswoman referred back to Stephenson’s comments during Thursday’s earnings conference call.
“While everybody in the industry is always going to be looking for more spectrum, at this stage I like our position,” Stephenson said.
He said his company is in the midst of its “most comprehensive organic growth initiative” in several decades, expanding in both wireless and wireline services. Acquiring spectrum is a key element of AT&T’s plan to extend its 4G LTE network to 300 million people by the end of 2014.
After opposition from regulators forced it to abandon its bid for T-Mobile, AT&T worried about getting the spectrum it needed to meet future customer demand and Stephenson was highly critical of regulators. He accused them of trying to pick winners instead of letting free markets work.
Since then, AT&T has gone on a spectrum acquisition spree. All are much smaller deals than T-Mobile, which awaits approval from regulators to merge with Richardson-based MetroPCS.
AT&T released the purchase price of only one other recent deal, $600 million for NextWave Wireless Inc., announced in August and closed Thursday, according to Stephenson.
The transaction with Verizon, subject to regulatory approval, is expected to close in the second half of this year.
In trading Friday, AT&T stock closed at $34.02 a share, up 27 cents.