What's Happening?
AT&T is set to acquire EchoStar's spectrum assets, including 30MHz of midband and 20MHz of lowband spectrum, for $23 billion. While the midband spectrum can be rapidly integrated into AT&T's existing network, the deployment of the lowband spectrum will take several years due to compatibility issues. AT&T plans to add 600MHz support to approximately 35,000 cell sites, incurring significant capital expenditure. The acquisition aims to enhance AT&T's wholesale business and expand its fixed wireless access (FWA) product, potentially increasing its capacity for nearly 1 million more FWA subscribers.
Why It's Important?
The acquisition of EchoStar's spectrum is crucial for AT&T's strategic expansion, particularly in enhancing its network capacity and coverage. The midband spectrum will provide immediate benefits, while the lowband spectrum will require long-term investment and development. This expansion is expected to bolster AT&T's wholesale business, offering more robust services to cable operators and other partners. Additionally, the increased capacity for FWA subscribers could pose a competitive threat to cable operators, who have been losing broadband subscribers to FWA solutions.
What's Next?
AT&T will focus on integrating the midband spectrum quickly, while planning the gradual deployment of the lowband spectrum over several years. The company will navigate regulatory approvals and invest in infrastructure to support the new spectrum. As AT&T expands its FWA offerings, it may attract more subscribers, increasing its market share in the broadband sector. Competitors like T-Mobile and Starlink may also seek to acquire EchoStar's remaining spectrum assets, intensifying competition in the telecom industry.
