AT&T Inc., one of the top dogs in the telecommunications industry, agreed to acquire Nextwave Wireless Inc. which holds licenses in the Wireless Communication Services (WCS) and Advanced Wireless Service (AWS) bands.  The acquisition will amount to up to $50 million plus the repurchase of debt from bondholders.

As part of the debt redemption and a separate agreement with Nextwave, AT&T will purchase a series of notes for an estimated amount of $600 million.  The series of notes represents about $1.1 billion of Nextwave’s debts.

The deal is expected to close by the end of the year.  The deal includes a $25 million payment, plus a contingent payment of up to roughly $25 million.

WCS spectrum was first auctioned in 1997 but has yet been utilized for mobile internet use for fear of interfering with satellite radio users in adjacent spectrum bands.  The acquisition is a step to free up unused spectrum for mobile internet access and they, along with Sirius XM, filed a joint proposal to the Federal Communications Commission that would protect the adjacent satellite radio spectrum from interference and enable WCS to be used for mobile internet.  If the FCC approves, AT&T will start deploying the spectrum to expand their 4G LTE capacity in roughly three years.

Analysts are already seeing the benefit of the acquisition for AT&T but they believe that it’s not the last large acquisition for AT&T this year.

“While we believe a larger deal may still be in AT&T’s future, these moves will buy the company time and increase its leverage while lowering its dependence on any single source of spectrum in the future,” UBS analyst John Hodulik said.

AT&T recently reported an 8.7 percent increase in revenue as more people are getting mobile.  The first half of the year has been good to AT&T which just makes them look forward to the rest of the year.