US operator AT&T today announced plans to acquire NextWave Wireless for up to US$600 million in an effort to bolster its spectrum holding.

NextWave bills itself as “a wireless technology company that manages and maintains wireless spectrum licenses”, but has also endured a troubled few years as a mobile broadband technology vendor. Today, NextWave holds licenses in the Wireless Communication Services (WCS) and Advanced Wireless Service (AWS) bands.  

WCS spectrum was first auctioned in 1997, but has not been utilised for mobile Internet usage due to technical rules designed to avoid possible interference to satellite radio users in adjacent spectrum bands. The frequencies are in the 2.3GHz band, and the licences include some "substantial service" build-out requirements which must be met by early March 2014.

AT&T hopes the US regulator (Federal Communications Commission, FCC) will allow it to use the WCS spectrum for LTE services, following a recent joint proposal by the operator with Sirius XM. The FCC is currently weighing the proposal, submitted in June.

“The proposed WCS rule changes and NextWave acquisition represent an alternative approach to creating additional wireless network capacity to help support skyrocketing wireless data usage on smartphones and tablets,” noted a statement from AT&T. “If approved, the proposal will enable AT&T to begin initial deployment of WCS spectrum for added 4G LTE capacity, in approximately three years."

Under the agreement, AT&T will pay about US$25 million to shareholders of San Diego-based NextWave, plus a contingent payment of an additional US$25 million. In a separate deal with the once-bankrupt company’s lenders, AT&T will acquire NextWave’s debt, bringing the deal’s total value to US$600 million. AT&T expects to complete the NextWave transaction by the end of the year, assuming it passes regulatory hurdles.