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AT&T Buys Spectrum Licenses for $2.5B
[October 09, 2007]

AT&T Buys Spectrum Licenses for $2.5B

(AP) AT&T (News - Alert) Buys Spectrum Licenses for $2.5B
Associated Press Writer
AT&T Inc. agreed to pay $2.5 billion for spectrum licenses that will allow it to expand wireless services or add broadcast video in much of its coverage area, the company announced Tuesday.

The deal to acquire the licenses from Aloha Partners LP, the nation's largest owner of 700 MHz frequency, will give AT&T 12 megahertz of spectrum covering 196 million people in 281 markets. It'll boost AT&T's presence in most of the top 100 markets in the United States.

The nation's largest wireless carrier could acquire still more of the spectrum in January when the Federal Communications Commission is scheduled to auction a large chunk used by analog television.

In 2009, when broadcasters must switch completely to digital television, their spectrum will be free for use by wireless providers and Wi-Fi networks.

With the spectrum AT&T is acquiring from Aloha, the company could either expand its existing wireless phone and data services or add broadcast television content that would be delivered to mobile phones.

Company spokesman Michael Coe said the company has not decided what it will do with the new spectrum. Some of it will be available immediately after the deal closes in six to nine months, the rest in 2009, he said.

AT&T already has begun exploring the delivery of broadcast video over wireless devices. Earlier this year, it announced a partnership with MediaFLO, a Qualcomm (News - Alert) Inc. subsidiary, to roll out broadcast content. No date or details for that offering have been announced.

Providence, R.I.-based Aloha, was founded by Charles Townsend and Amos Hostetter, who each made fortunes in the wireless and cable business in the 1990s. Aloha bought most of the 700 MHz spectrum it holds during auctions in 2001 and 2003, and it acquired several small companies that owned licenses.

Since Aloha launched early trials of mobile broadcasting in 2005, interest in the spectrum has been heated as numerous companies expressed interest in the upcoming auction, which could raise as much as $15 billion.

Apple (News - Alert) Inc. has declined to comment on speculation, which some analysts dismissed, that it will bid.


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