$300M deal gets upstart operator over 50 wireless broadband licenses in the Southern states

Dan Jones, Mobile Editor

February 20, 2007

2 Min Read
AT&T Sells Spectrum to Clearwire

AT&T Inc. (NYSE: T) is selling all its 2.5GHz wireless spectrum to Clearwire LLC (Nasdaq: CLWR) for $300 million in a deal that opens the way for the startup operator to offer more broadband services in the Southern U.S.

AT&T is selling off over fifty 2.5GHz licenses owned by the former BellSouth corporation that covers areas such as Alabama, Florida, Georgia, Kentucky, Louisiana, Missisippi, North Carolina, South Carolina, and Tennessee. From the early 1990s until recently, BellSouth was the second largest carrier owner of 2.5GHz spectrum -- which will be used for WiMax services -- in the U.S., after Sprint Corp. (NYSE: S). (See WiMax USA: Spectrum Crunch.)

The sell-off was one of the terms of the merger between AT&T and BellSouth. AT&T says the sale is expected to close promptly, following government approvals.

Clearwire has never made a secret of its need to buy in more spectrum to meet its ambitious WiMax goals. "We plan to continue acquiring spectrum in markets that we believe are attractive for our service offerings," the company said in its recent S1 filing for a planned $480 million IPO. (See Clearwire Takes Another Cut at IPO and Clearwire Wants $480M in IPO.)

The Craig McCaw venture already claims to be the second largest owner of wireless broadband spectrum in the U.S. "As of November 30, 2006, our spectrum rights in the United States covered an estimated 205 million people," the company noted in its Securities and Exchange Commission (SEC) documents.

Clearwire currently offers fixed wireless broadband services to more than 188,000 U.S. subscribers in 34 markets. It is also plotting a move to mobile WiMax services in some markets as soon as suitable equipment becomes available. (See Motorola's WiMax Wait.)

The sell-off positions Sprint Nextel and Clearwire as the two to beat in WiMax circles over the next two or three years. Sprint has 90MHz of 2.5GHz spectrum, covering 80 markets in the U.S., and is planning to fire up initial mobile WiMax at the end of 2007 with a nationwide rollout in 2008. (See What's Next for Sprint Nextel?.)

It may not, however, mark the end of AT&T's WiMax plans. The operator still has 22 licenses in the 2.3GHz band that could potentially be used for wireless broadband services as well. (See AT&T Looking at WiMax for Video.)

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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