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AT&T Inc. (NYSE:T), the leading communications provider in the United States announced its decision to buy Nextwave Wireless Inc. (PINK:WAVE), holder of wireless spectrum licenses, such as Wireless Communication Services (WCS) and Advanced Wireless Service (AWS) brands.

Under the agreement, AT&T Inc. (NYSE:T) agreed to purchase all the outstanding common shares of NextWave for $1.00 per share, plus a contingent payment of $25 million in escrow funds. In addition, AT$T also entered separate note purchase agreements with the holders of NextWave’s 15% Senior Secured Notes, for a total of $600 million. The outstanding debt held by NextWave’s bondholders will be paid through cash, and a transfer of selected NextWave assets. NextWave’s debtholders agreed to the terms, and a majority of its shareholders supported the transaction.

The WCS licenses, covering 30 a MHz-wide swath of the spectrum was auctioned by the Federal Communications Commission (FCC) for commercial use but the reception was moderate raising less than $14 million. According to ATT, the WCS licenses were not implemented for mobile internet usage, because of technical regulations that required power limits and guard band requirements, to avoid interference with delicate satellite signals.

To be able to utilize its 2.3 GHz spectrum and deploy its 4G LTE service, AT&T Inc. (NYSE:T) and Sirius XM filed a joint proposal of rules to the FCC that would protect the satellite radio spectrum, remove the power and emission restrictions, and allow the implementation of the WCS spectrum for mobile internet services. The FCC is still evaluating the proposal.

According to AT&T Inc. (NYSE:T), its acquisition of NextWave and the proposed changes in the WCS rules will provide alternative ways in creating additional wireless network capacity, to support the increasing consumer usage of wireless data in smartphones and tablets. AT&T will be able to deploy the WCS spectrum for added 4G LTE capacity within three years.

The AT&T Inc. (NYSE:T) and NextWave merger agreement is also subject to review by regulators, including the FCC, FTC, and the Department of Justice before closing the transaction.

Meanwhile, AT&T previously announced that its board of directors approved a motion to repurchase approximately 300 million, or 5 percent of AT&T shares in addition to its decision to buy back 300 million shares in December 2010. The total amount of the repurchased AT&T shares from December 2010 to June 2012 was $4.6 billion. ATT said the company returned nearly $10 billion, including dividends, to its shareholders during the first six months of 2012.