Verizon announced Thursday it has made a deal to buy 5G spectrum holder Straight Path Communications for $3.1 billion, almost double the $1.6 billion AT&T offered previously.
Straight Path holds licenses for various frequencies that could provide 5G network coverage across the entire United States, Ars Technica reported.
AT&T announced April 10 it had bid $1.6 billion to acquire Straight Path, but rumors started immediately that Verizon would try to outbid them.
Verizon said the deal is expected to be finalized within nine months, pending FCC review.
“Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” the company said, Ars Technica reported.
4G LTE is currently the predominant cellular network in the U.S. It uses low-band frequencies below 1 GHz, which can cover long distances and penetrate walls well. 5G uses higher frequencies and has much faster data speeds, Ars Technica said.
The major networks are in a race to build 5G networks nationwide, with T-Mobile saying they will build one before anyone else and Sprint promising 5G by 2019. Verizon is already engaged in trial of 5G as a replacement for broadband home internet service, CNet reported. AT&T hopes to deliver DirecTV service through a 5G network as well.
Straight Path bought the licenses for the frequencies that will be used for 5G 15 years ago, but as of October the company only had nine employees and was fined $100 million by the FCC for not building a network that made use of the licenses, The Verge reported. Its fine will be reduced to $15 million plus 20 percent of license sales once the company is sold.