AT&T's (NYSE: T) purchase of Leap Wireless for $15 per share, or about $1.19 billion, and its integration of that company's PCS and AWS band spectrum, covering 137 million people, into its existing spectrum licenses will be a major cog in Project Velocity IP (Project VIP), the carrier's multibillion-dollar wireless/wireline expansion of U-verse.
"Immediately after approval of the transaction, AT&T plans to put Leap's unutilized spectrum--which covers 41 million people--to use in furthering its 4G LTE deployment and providing additional capacity and enhanced network performance for customers' growing mobile Internet usage," the carrier said in a press release.
In addition to mobile Internet, however, AT&T has said Project VIP will use broadband wireless to supplement and, in some cases, actually replace wireline broadband, including broadband-based IPTV, in rural areas of the country and those places where the wireline infrastructure has not yet been upgraded. This, carrier executives had said in the past, will give AT&T the opportunity to continue expanding U-verse as it builds out--or decides not to build out--wireline infrastructure in new areas of its footprint.
"We anticipate that LTE will be a broadband coverage solution for a portion of the country; we just haven't yet gotten to the point where we have enough experience under our belt to know exactly what that footprint is going to be," John Donovan, senior executive vice president of AT&T Technology and Network Operations, said during a presentation to the Citi Global Internet, Media & Telecommunications Conference in Las Vegas in January.
John Stephens, senior executive vice president and CFO, expanded on that goal and specifically laid out progress during a first quarter earnings call.
"It's still early, but we already have made tremendous progress with our LTE deployment," Stephens pointed out during the call. "We are running ahead of schedule with nearly 200 million LTE POPs covered to date and we expect to complete nearly 90 percent of our 300 million POP LTE buildout by the end of this year."
On the surface, of course, the Leap acquisition is being positioned as a way to juice up AT&T's prepaid business. AT&T said it would retain Leap's Cricket brand name while providing access to its 4G LTE mobile network.
"The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service," the AT&T press release continued. " Cricket's employees, operations and distribution will jump start AT&T's expansion into the highly competitive prepaid segment."
In addition to the PCS and AWS spectrum that AT&T is acquiring, the carrier is also getting a network that covers about 96 million people in 35 states--about 21 million of whom have access to 4G LTE.
- AT&T issued this press release
AT&T U-verse IPTV gains more subscribers than broadband in Q1
AT&T exec: 'We're going to expand U-verse'