The spectrum acquisition spree of large telecom carriers continues with AT&T Inc. (T) joining the list. The premier carrier has acquired 49 Advanced Wireless Spectrums from Aloha Partners II L.P.
The spectrum covers 50 million people in 14 different states, which includes California, Colorado, Connecticut, and Massachusetts among others. AT&T wants to complete the transaction in the second half of 2014 subject to regulatory approvals.
In mid Dec 2013, Verizon Communications Inc. (VZ) strengthened its spectrum base by completing the acquisition of U.S. Cellular Corp’s (USM) wireless airwaves in Missouri. Recently, T-Mobile U.S. (TMUS) agreed to purchase some low-band spectrums in the 700 MHz block for $2.365 billion in cash, while transferring certain AWS and PCS airwaves worth $950 million, to Verizon Wireless.
The continuous quest for spectrum clearly proves how crucial they have actually become over time. Dallas-based AT&T has been acquiring spectrum to boost its LTE network. The carrier provides the best Internet speed in the country covering 270 million people in 500 markets.
With an aim to support the soaring customer demand for mobile Internet services, all the leading U.S. carriers are investing a lot of cash to ramp up their spectrum portfolio either through swap deals or by purchasing it from smaller counterparts. AT&T is no different having completed spectrum acquisition from Verizon in Oct 2013. We believe this deal will not only complement AT&T’s existing spectrum but will also allow the telecom incumbent to stay ahead in network deployment initiatives.
Meanwhile, Providence-based Aloha is the largest owner of 700 MHz spectrum and currently possess 12 MHz of spectrum in the above mentioned band covering all the top 10 U.S. markets and around 84% of the population in the top 40 markets.
AT&T currently carries a Zacks Rank #3 (Hold).
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