AT&T’s aggressive moves in the spectrum space are set to include some internal adjustments as the carrier noted in a recent government filing that it expects to have its current 2G-based GSM/EDGE network shuttered by the end of 2016. The move would allow the carrier to free-up vital spectrum assets in the 850 MHz and 1.9 GHz bands to support its current HSPA-based 3G and LTE-based services.
“We will manage this process consistent with previous network upgrades and will transition customers on a market-by-market basis from our Global System for Mobile Communications (GSM) and Enhanced Data rates for GSM Evolution (EDGE) networks (referred to as 2G networks) to our more advanced 3G and 4G networks,” the carrier noted in a 10-Q filing with the Securities and Exchange Commission. “We expect to fully discontinue service on our 2G networks by approximately January 1, 2017. Throughout this multi-year upgrade process, we will work proactively with our customers to manage the process of moving to 3G and 4G devices, which will help minimize customer churn.”
AT&T noted that at the end of the second quarter just 12% of its postpaid customer base was on GSM/EDGE-only devices. All of the carrier’s current devices are backward compatible with the GSM/EDGE network.
Over the past month, AT&T has announced a handful of spectrum acquisition initiatives designed to bolster the carrier’s portfolio. Earlier this month AT&T noted in a filing that it was looking to pick up various 700 MHz licenses from a handful of rural operators; which coincided with its plans to acquire NextWave Telecom for $650 million in order to get its hands on NextWave’s various 1.7/2.1 GHz and 2.3 GHz spectrum licenses. The carrier also reportedly is looking to pick up 2.3 GHz spectrum licenses from Comcast and Horizon Wi-Com, as well as working with Sirius XM to clarify interference issues in the 2.3 GHz band.
These spectrum deals followed AT&T’s failed attempt to purchase rival T-Mobile USA last year for $39 billion, which the carrier said it needed in order to get its hands on sufficient spectrum holdings to support growing data demand from consumers. Government regulators shot down that attempt citing competitive implications of combining the nation’s No. 2 and No. 4 largest operators. Instead of acquiring T-Mobile USA’s spectrum, AT&T was forced to hand over $3 billion in cash and a significant chunk of its 1.7/2.1 GHz spectrum holdings to T-Mobile USA’s parent company Deutsche Telekom as a break-up fee.
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