AT&T quietly acquires FiberTower for 24, 39 GHz spectrum

FiberTower owns spectrum in various locations throughout the country. Image: AllNet Insights and Analytics.

AT&T quietly acquired a company called FiberTower in a move to bulk up its high-end spectrum holdings in advance of 5G.

FiberTower, which is in bankruptcy, has spectrum in the 24 GHz and 39 GHz bands covering 30 billion MHz POPs, according to Wells Fargo Securities and AllNet Insights. Terms of the deal were not disclosed.

The carrier revealed the pickup in a media announcement earlier this week outlining Project AirGig, a new initiative that uses power lines to guide wireless signals through antennas placed on utility poles. AT&T announced that it has entered into “advanced discussions” with multiple electric utilities and other companies to test Project AirGig technology in two areas this fall.

“We’ve started deploying small cells using Centralized RAN (C-RAN) architecture in the city of San Francisco,” AT&T said. “This deployment, which will be replicated in other cities, will densify our network and lay the groundwork for 5G and beyond. Additionally, we have entered into an agreement to acquire FiberTower Corporation, and its mmWave spectrum rights, to assist in the execution of this vision.”

The move is similar—in strategy, if not in scale—to Verizon’s $1.8 billion buyout of XO Communications, which was announced a year ago. That deal, which closed this morning, brings Verizon 188 billion MHz-POPs of spectrum in the 24 GHz and 39 GHz bands—six times FiberTower’s holdings, Wells Fargo observed.

High-band spectrum has become a top priority for carriers because while it doesn’t propagate as far as lower bands, it offers superior capacity, making it ideal for small cells. So while the FiberTower acquisition may not be a blockbuster in terms of dollars, it could be a crucial move for AT&T as the market moves into the 5G era.

“We view this as a positive strategic move for AT&T. Once Verizon closes on the XO acquisition, we would expect Verizon to talk much about the benefits this ultra high-band spectrum (24 and 39 GHz) will bring it in a 5G world,” Jennifer Fritzsche of Wells Fargo Securities wrote in a note to investors before the closing of the XO deal was announced. “While T-Mobile has some 28 GHz spectrum, Verizon will have by far the most of this spectrum following the XO close … That said, by making this move, AT&T now has an asset to point to and can be a part of the ultra high-band spectrum ‘conversation.’ We expect this spectrum and 5G will be a big-time focus in Barcelona at Mobile World Congress.”

FiberTower had raised $150 million in a Series A round led by Crown Castle in 2005, according to CrunchBase, before declaring bankruptcy in 2012.

Article updated Feb. 2 with new image from AllNet.
Article updated Feb. 8 with accurate FiberTower holdings.