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AT&T's Flo build-out carries $1B-plus cost

Tue, 12/13/2011 - 2:55pm
Maisie Ramsay, Wireless Week

AT&T told the FCC yesterday that it will cost between $1 billion and $2 billion to use Qualcomm's Flo TV spectrum for supplemental downlink capacity in its LTE network.

"Our best estimate is that our cost to deploy this technology to provide our customers with higher-quality LTE services will be between $1 billion and $2 billion dollars in network costs, which does not include development or device costs," AT&T said in an ex parte document filed with the FCC on Monday.

AT&T said it will need to develop handsets with special chips in order to take advantage of Flo's extra capacity. Those devices are expected to hit shelves as early as late 2014, according to the FCC filing.

AT&T said in December 2010 that it would pay $1.93 billion to acquire the 700 MHz spectrum used by the former mobile television service.

The D-block and E-block spectrum covers more than 300 million people, including 70 million people in five of the country's top 15 metropolitan areas. The FCC's preliminary review of the acquisition shows AT&T will hold between 6 MHz and 80 MHz of spectrum below 1 GHz after the deal closes.

The FCC said last month it will grant a conditional approval for the deal but has yet to issue the order.

The FCC's review of the Flo TV deal got held up in August when the agency decided to stop its informal shot clock on the transaction to examine its "related issues" to AT&T's $39 billion merger with T-Mobile USA.

The agency announced it would approve the spectrum sale with certain conditions after AT&T pulled its application for the T-Mobile deal, and it has restarted the shot clock.

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