Can Sirius XM Help AT&T Win the Mobile Wars?


AT&T (NYS: T) is pulling every available string to come out on top in the mobile market wars. The proposed buyout of T-Mobile USA met with shaking heads at the regulatory level, costing Ma Bell billions of dollars in breakup fees. Meanwhile, archrival Verizon (NYS: VZ) is striking back by snagging spectrum licenses from a consortium of cable companies (if the regulators let that deal pass).

So AT&T has been twisting in the wind for a while. An unlikely ally might be able to offer some relief, though.

The company just announced a $600 million buyout of spectrum-rich but cash-poor NextWave Wireless. The deal involves the usual ingredients of a modern buyout: A small up-front cash payment, a rich allotment of radio spectrum licenses, and AT&T shouldering NextWave's crushing debt load.

Well, and one more offbeat spice on the side: Ma Bell wouldn't be able to use about half of these acquired radio licenses if it hadn't negotiated a pact with satellite radio monopolist Sirius XM Radio (NAS: SIRI) .

Some of the licenses bunch right up to Sirius' satellite radio waves. If you followed the LightSquared debacle at all, you already know that terrestrial radio towers can drown out the much weaker signals from neighboring satellite transmissions without even trying. LightSquared's high-powered mobile network plans would have trampled all over the GPS satellite signals that navigation devices everywhere depend on. If this deal passes regulatory muster, it'll be the first time tower-bound signals are allowed this close to a satellite-specific signal band.

The FCC is still poring over the agreement between Sirius and AT&T, but I think it's unlikely to meet much resistance since the supposed interference victim already agreed to the terms. The proposed contract includes a 5-MHz margin of safety between the two signal blocks, where no mobile devices can send any radio signals. If this particular deal is stopped, it would be over anticompetitive concerns rather than signal management problems.

It's unclear exactly what Sirius XM stands to gain from this agreement, but the company has plenty of other business catalysts on tap. Learn all about Sirius in a brand-new premium report on the company, penned by one of our finest Foolish analysts and backed by a full year of analysis updates. Get started now -- just click here.

The article Can Sirius XM Help AT&T Win the Mobile Wars? originally appeared on

Fool contributorAnders Bylundholds no position in any of the companies mentioned. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published