Verizon outbids AT&T to acquire Straight Path Communications for $3.1bn

With AT&T and Verizon at the centre of a bidding war, the battle for 5G wireless spectrum has officially begun. And as for the first round, Verizon reportedly has won it.

According to a Wall Street Journal report, Verizon Communications has outbid Dallas-based AT&T to acquire Straight Path Communications.

Last month AT&T announced it would buy Straight Path Communications for $1.6 billion. However, after that announcement, an unnamed multi-national telecommunications company, reportedly Verizon, walked up with a bid of $3.1 billion in stock. And obviously, won the bid and the company.

Straight Path Communications

Straight Path Communications is a Virginia-based company that holds valuable spectrum licenses that will play a significant role in laying the groundwork for 5G services.

Straight Path began searching for a buyer in January after the Federal Communications Commission fined it $100 million for failing to deploy the wireless services required by its spectrum licenses, a practice called “spectrum squatting.”

At the time of the announcement, AT&T said it was planning to use the company's millimeter-wave (mmWave) spectrum to "accelerate the delivery of new experiences for consumers and businesses like virtual and augmented reality, telemedicine, autonomous cars, smart cities and more."

Well, now it seems, Verizon will be using it.

The 5G war apparently began when both AT&T and Verizon started making acquisitions to prepare for 5G. In February, AT&T quietly purchased FiberTower, which also holds fundamental spectrum rights, while Verizon agreed to pay $1.8 billion for XO Communications’ fiber-optic network business.