NEW YORK ( TheStreet) - AT&T ( T - Get Report) received approval to complete its purchase of $1.93 billion of spectrum from Qualcomm ( QCOM - Get Report), but analysts said AT&T still needs to address its spectrum issues.

The Federal Communication Commission approved the 700 MHz spectrum sale, but this only alleviates issues in the medium-term, wrote Piper Jaffray analyst Christopher Larsen in a research report. Larsen rates AT&T overweight with a $34 price target.

Michael Hodel of Morningstar said the deal still leaves AT&T behind Verizon Wireless ( VZ - Get Report) in the 700 MHz band in most markets.

Stifel Nicolaus analyst Christopher King said AT&T may look at acquiring Dish Network ( DISH - Get Report) to help it beef up its spectrum.

"Dish has expressed interest in combining with T-Mobile, and AT&T could look at acquiring Dish, with spectrum a key consideration," King wrote in his research note. He rates shares of AT&T buy with a $32.50 price target.

"White space radio" may be a solution for the spectrum problems. Once used for analog TV, the spectrum could be used to clear up congestion issues. Independent local TV stations in large urban areas such as New York may benefit if they are given the opportunity to sell their airwaves as part of the auction. Wireless companies such as AT&T could pay handsomely for the rights.

Ben Abramovitz of Kaufman Bros. said it's too early to tell whether the FCC would auction the white services in 2012, although it has been talked about.

"Adding spectrum is not just a defensive game, it is offensive too. It is about making sure your competitors do not have it," Abramovitz said. He mentioned that AT&T may wind up doing a networking sharing agreement with T-Mobile USA down the line as an option. He rates shares of AT&T a hold with a $30 price target. AT&T recently ended its $39 billion bid to buy T-Mobile.

McCall Butler, a spokesperson for AT&T, said in an email the company would continue to "invest aggressively" in its network.

Verizon, on the other hand, has publicly stated it doesn't need spectrum until 2015, but Abramovitz said he has heard of problems as the company makes the switch to 4G from its 3G network.

Verizon recently purchased $3.6 billion of spectrum from a consortium of sellers, including Comcast ( VZ - Get Report), Time Warner Cable ( TWC) and Bright House Networks

AT&T shares were up 1% to $29.95 in light Friday trading.

Interested in more on AT&T? See TheStreet Ratings' report card for this stock

-- Written by Chris Ciaccia in New York

Readers Also Like: