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By Simon Bond

Last week, we wrote to you to point out the situation with US-based Millimetre Wave Spectrum business Straight Path.

Excerpted below is a part of the note sent regarding what was transpiring regarding Straight Path Inc, listed in the US.

What is it? And why should you care? Well, you should take note of recent developments in the United States regarding the 5G strategies of the major telcos, where they see the future, and what will be able to be achieved. A couple of weeks ago, a little-known listed company in the US called Straight Path Communications Inc were trading around $35.00, until AT&T, not an unknown telco in the US, launched a bid for the company, (which incidentally holds a large trove of 28 GHz and 39 GHz millimeter wave spectrum used in mobile communications, and would give a new owner an advantage in 5G development).

The bid price was $95.63 which represented about a 170% premium above the price at the time, one would have thought a knock out bid. Well not so fast, now another bidder has emerged, rumoured to be Verizon with a bid of $104.64. AT&T are not yet out of the race and are currently considering their position.

And now this; shares in Straight Path Communications (STRP) soared on Wednesday last week, as a bidding war heated up for the wireless company between AT&T (T) and another major telecom player, believed to be Dow component Verizon Communications (VZ).

Straight Path stocks jumped on word that the company received a $2.3 billion offer from an unidentified "multinational telecommunications company" — an offer that it called a "superior proposal." Straight Path said in a statement that the unnamed company had revised its offer to $135.96 per share, up from $104.64 per share.

The bidding for Straight Path began on April 10, when AT&T agreed to pay $95.63 per share, a near 160% premium over Straight Path's closing price of $36.48 on April 7.

Straight Path is a key acquisition target, as the company controls a spectrum-rich bandwidth of wireless licenses that are inviting to telecom providers. Straight Path owns high-frequency airwaves in what is known as the 28-gigahertz and 39-gigahertz millimeter wave band, that can be used for 5G wireless services.

Both AT&T and Verizon plan to deploy 5G wireless services, which are expected to include high-speed broadband to residential homes as well as connections to self-driving cars, drones, and other web-connected devices, generally called the "Internet of Things."

And the best placed Australian listed company to be a part of all of this is, in my opinion, Superloop Ltd.

Published: Monday, May 08, 2017


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