In a move that will help AT&T build out its LTE 4G network, the carrier announced today that it has purchased NextWave Wireless for an upfront fee of $25 million, plus an additional $25 million contingent payment.

NextWave is a holding company with a portfolio that includes both Wireless Communications Services (WCS) and Adavanced Wireless Services (AWS) spectrum bands. AT&T plans to use its WCS spectrum to add more capacity to its LTE network, naturally.

The holding company first acquired WCS spectrum in a 1997 auction, but it wasn’t able to use it for mobile Internet access because of potential interference with satellite radio service. A recent joint proposal between AT&T and Sirius, filed with the FCC in June, protects the satellite radio band and finally opened up the possibility for WCS to deliver mobile Internet. If the proposal gets approved, AT&T will begin deploying LTE on the WCS spectrum in around three years.

AT&T will need as much 4G spectrum as it can get, especially with the launch of the next iPhone within the next few months, which is expected to feature 4G LTE capabilities. Verizon’s LTE network may be robust enough now to support an onslaught of new 4G users, but AT&T’s network is almost a year younger and hasn’t been stressed nearly as much.

As part of the acquisition, AT&T says it will acquire all of Nextwave’s outstanding debt, some of which will be paid off by Nextwave itself, to the tune of $600 million in cash. Nextwave’s bondholders will be paid off through cash payment, as well as payment via Nextwave assets.

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