AT&T Inc. has agreed to buy 12MHz of high-speed wireless spectrum from Aloha Partners LP for US$2.5 billion, the company announced Tuesday.
The Aloha Partners spectrum, purchased in auctions held by the U.S. Federal Communications Commission in 2001 and 2003, is in the highly coveted 700MHz band, an area of the spectrum ideal for long-range broadband services, many experts say. The FCC is scheduled to auction another 62MHz of spectrum in the 700MHz band in January.
Aloha was the largest buyer of 700MHz spectrum in those earlier auctions. The AT&T purchase covers all the 700MHz spectrum owned by Aloha, AT&T spokesman Michael Coe said.
The Aloha spectrum covers 196 million U.S. residents, including 72 of the 100 largest markets in the U.S., AT&T said.
AT&T will use the spectrum to meet "customer demand for mobile services, including voice, data and video," Forrest Miller, the company's group president for corporate strategy and development, said in a statement.
AT&T will use the spectrum either for broadcast video or for two-way communications such as voice, data or multicast content, Coe said.
Coe declined to comment on how the Aloha purchase will affect AT&T's plans for the upcoming 700MHz auctions.
The FCC auctions next year are expected to raise more than $10 billion. The spectrum, called "beachfront property" by many observers, is ideal for long-range wireless telephone and broadband services, with signals that travel up to four times farther than in higher spectrum bands.
Aloha, based in Providence, Rhode Island, set up a subsidiary called HiWire in 2006 to deliver television programming to mobile devices.
The AT&T purchase is subject to government approvals. The company expects the deal to close in six to nine months.