The move is AT&T's latest toward building a solid base of 5G spectrum holdings in preparation for a 5G network. AT&T already purchased FiberTower back in February in its pursuit of more 5G spectrum. The FiberTower deal netted AT&T bandwidth in the 24 GHz and 39 GHz bands.

Straight Path's spectrums covers the entirety of the country and consist of 735 mmWave (millimeter wave) licenses in 39 GHz and 133 licenses in 28 GHz band. The transaction has a total value of $1.6 billion according to AT&T. Straight Path shareholders will be paid $1.25 billion, or $95.63 per share, in AT&T stock.

Currently, carriers are limited to 4G LTE connectivity for mobile devices but the move toward Gigabit LTE—the necessary in-between step to move from 4G to 5G—is already being pushed by Qualcomm and other carriers. 5G is still years away, but buying up spectrum is the best way to prepare for the future rollout.

According to the International Telecommunications Union, 5G peak speeds will reach 20Gbps down and 10Gbps up.

The deal isn't set in stone yet

AT&T's purchase of Straight Path isn't a done deal yet. The deal still needs be passed through regulatory approval with the FCC before the purchase can be finalized. The whole process may take up to 12 months before closing.