AT&T strengthened its position in the fourth generation (4G) wireless services market on Monday with an agreement to purchase the lower 700 MHz spectrum band holdings of Qualcomm, Inc. for $1.925 billion. AT&T, the nation’s second-largest carrier, is slated to launch 4G wireless broadband services next year that will compete against the current WiMax network offerings of the Sprint-Nextel Clearwire venture and Long Term Evolution (LTE) services that were introduced by Verizon earlier this month. The spectrum covered by Monday’s agreement covers a population of 300 million nationwide that includes more than 70 million potential customers in New York, Los Angeles and other top 15 markets nationwide. Qualcomm, one of the world’s leading makers of wireless chipsets, acquired the channels in question during the FCC’s auction of 700 MHz band spectrum that netted a record $19 billion in winning bids in 2008. Qualcomm later used that spectrum to support its FLO TV mobile television system, but that service ultimately failed as few customers signed up. AT&T, meanwhile, said the download capacity provided by Qualcomm’s spectrum will supplement video and other 4G broadband services that AT&T intends to offer to as many as 75 million people by the end of next year. Although AT&T and Qualcomm expect to receive regulatory approval in time to consummate the transaction by late 2011, one telecom analyst predicted that the deal will at least “trigger the government’s concern over allowing either Verizon Wireless or AT&T to increase their spectrum lead in the coveted spectrum below 1 GHz.” Warning that the agreement will “remove yet another large competitor from the mobile broadband playing field,” the Rural Cellular Association urged the FCC to impose various conditions on the deal that include data roaming and device interoperability mandates as well as a prohibition against exclusive handset agreements.
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Qualcomm sells 700 MHz spectrum to AT&T for $1.9 billion
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