Does AT&T Have Buyer’s Remorse Over FiberTower?


With the news that FiberTower (officially acquired by AT&T on February 9) agreed to give up many of its millimeter wave licenses as a result of the running dispute with the FCC and will give up its 94, 24 GHz licenses and a portion (595) of its 39 GHz licenses, Jennifer M. Fritzsche, Senior Analyst for Wells Fargo Securities weighed in on the ramifications.

“While this is a lot of spectrum,” Fritzsche said, “one has to wonder if AT&T (T) now looks at the Straightpath asset as the ‘one who got away.’ Recall, in Spring 2017, there was a bidding war for Straightpath between T and VZ (VZ won bidding ~ 2x T’s initial bid). VZ closed on this acquisition in January and the FCC put NO restrictions on this spectrum. According to Allnet Insights, with this deal (along with the mmwave spectrum VZ acquired from XO Communications and Nextlink) VZ now owns ~30% of all licensed millimeter wave spectrum,” she said. “To be fair, the price tag of FiberTower was a LOT less than [the] Straightpath asset ($207MM vs. $3.1B).”  

Fritzsche said she knows that millimeter wave spectrum is critical to many of T and VZ’s 5G plans (and TMUS has been a buyer as well).

“If the FCC doesn’t get moving on getting more of this spectrum into the carriers’ hands, then it is hard to argue that VZ is not sitting in the mmwave catbird seat,” she said. “The FCC just got a whole lot more spectrum to auction off now that it has taken some back from FiberTower. The irony would not be lost on us if we saw VZ actually win this FiberTower spectrum if it ever came back to the market. It almost would be as ironic as learning part of the VZ fiber overbuild is happening in California, Texas and Florida,” she said.                                      

February 13, 2018

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