AT&T Eyes Mobile TV Play via $2.5B Deal With Aloha

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AT&T acquired wireless spectrum in the 700-megahertz band covering 196 million people – in 72 of the top 100 markets in the United States – from Aloha Partners for about $2.5 billion in cash.

The company will use the 12-MHz of spectrum from Aloha for either broadcast video or two-way communications (such as voice, data and on-demand video), but not for both, AT&T spokesman Michael Coe said. The company has not determined what services it expects to offer in the 700-MHz spectrum, he added.

Aloha Partners, based in Providence, R.I., purchased the spectrum during Federal Communications Commission auctions in 2001 and 2003 and through subsequent acquisitions of spectrum owners.

As part of the deal, AT&T will acquire Aloha’s Hiwire subsidiary, which has planned to conduct a mobile TV trial in Las Vegas with 24 live channels.

AT&T announced earlier this year that it planned to roll out live mobile TV service through a partnership with Qualcomm’s MediaFLO USA subsidiary in the fourth quarter of 2007. Coe said the acquisition of the 700-MHz spectrum had “no bearing on our position” with MediaFLO.

Coe declined to comment on whether AT&T plans to participate in the FCC auction for 62 MHz of spectrum in the 700-MHz band, set for January 2008. That spectrum is becoming available with the Feb. 17, 2009, conversion of the TV-broadcasting system from analog to digital transmission. Previously, Aloha had said that its spectrum will be clear of any broadcast interference by February 2009 because of the digital-TV transition.

Overall, AT&T said Aloha’s 12-MHz of spectrum covers 75% of the U.S. population in 281 markets, including the top 10 U.S. markets. The phone company said it anticipates receiving necessary government approvals and closing the transaction in six to nine months.

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