In the Race to Develop 5G Network, Verizon Wins Bidding by $3.1 Million

It seems like the race for developing the highly awaited 5th generation network for mobile communications is on. Verizon was in a war with AT&T in a bid for Straight Path Communications, regarding its spectrum holdings. The former company has gained victory over AT&T in its bid war, and Verizon wins bidding with a proposal for over $3 billion, as reported by the Wall Street Journal (WSJ). With this feat achieved, Verizon will now have an advantage for 5G development credited to the Straight Path’s Spectrum holdings.

Verizon Wins Bidding by Double the Amount

verizon wins bidding

Straight Path Communications, a Virginia-based company, has licenses for using high-frequency radio waves vital for the next-gen wireless technology. Before a month, AT&T announced to cash in $1.6 billion to acquire Straight Path Communications. After which, Verizon started this bid war to acquire the same company for developing wireless technology. However, when Verizon came up with an offer of $3.1 billion in stock, AT&T reportedly declined to match up. So now, Verizon winds bidding over AT&T by almost double the amount AT&T had proposed.

According to the report on WSJ, the valuation of Straight Path was about $400 million two months ago. Also, as of October, the communications company had only 9 employees.

The plus point for the owner (Verizon) of Straight Path Communications is its licenses, as reported above. Straight Path has a huge trove of 39 Gigahertz (GHz) and 28 Gigahertz (GHz) millimeter wave spectrum that can be used for mobile communications.

Benefits of Next-gen Wireless Technology

Last month, when AT&T announced its acquisition plans, it had mentioned the advantages of a 5th generation network. It said that a 5G network will be able to support areas like autonomous/self driving, smart cities, internet-based products and services, telemedicine, Augmented reality (AR), and Virtual Reality (VR). After gaining a victory over AT&T with almost double the bidding amount, Verizon will now reap the benefits of the next-gen wireless technology.

Verizon wins bidding for Straight Path Communications this time. But it is not the first acquisition by either of these companies. During February, AT&T purchased FiberTower, another company that has key rights regarding spectrum. On the other hand, the New Jersey company Verizon, struck a deal with XO Communications for $1.8 billion to acquire its fiber-optic network business.

Straight Path Communications Finds a Potential Buyer

verizon wins bidding for straight path communications

This communications company received a fine of $100 million in January. The Federal Communications Commission fined Straight Path as it failed to deploy the required wireless services necessary for its spectrum licenses. This practice is called- ‘Spectrum Squatting’. So, after this blow, Straight Path Communications started its search for a strategic alternative, specifically a potential buyer, reports TechCrunch.

Well, the news that Verizon wins bidding for Straight Path over AT&T is great for the communications company also, as it has finally found a potential buyer.

Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

PMI seals $1.51 billion takeover of British inhalation specialist Vectura

PMI seals $1.51 billion takeover of British inhalation specialist Vectura

Philip Morris International (PMI) acquires a 22.6% stake in British inhalation specialist Vecutra closing in on the controversial $1.51 billion takeover.
13 hours ago
Apple co-founder Steve Wozniak joins the space race

Apple co-founder Steve Wozniak joins the space race

Wozniak, popularly known as “Woz”, is setting up a private space company with Ripcord co-founder Alex Fielding. In a tweet, Wozniak shared a promotional video for the company c
2 days ago
Auto chip shortage affects its production; factory closures rise

Auto chip shortage affects its production; factory closures rise

Automakers like Peugot, Ford, and Toyota are on the run to regain high-margins from the auto chip making since the pandemic and weather disasters have taken over.
2 days ago
Boeing bullish on growth in Asia-Pacific region

Boeing bullish on growth in Asia-Pacific region

Boeing, the US manufacturer projects that its global fleet of airline planes will surpass 49,000 by 2040.
2 days ago
Intuit snags email marketer Mailchimp for $12 billion

Intuit snags email marketer Mailchimp for $12 billion

Intuit, the market of TurboTax and QuickBooks, is acquiring email marketing group Mailchimp for $12 billion.
3 days ago
EU prosecutors investigating 300 fraud cases involving nearly €4.5 billion

EU prosecutors investigating 300 fraud cases involving nearly €4.5 billion

EPPO investigates and prosecutes cases in 22 European Union Countries where Poland, Hungary, Sweden, Denmark and Ireland remain out of the scene.
3 days ago