AT&T Snaps Up Aloha Partners' Spectrum

Aloha Had Been Testing Hiwire Mobile-TV Device on Spectrum Purchased by AT&T

Consolidation continues to hit the nascent mobile-TV space, as AT&T announced that it will purchase licenses to 700-megahertz spectrum from Delaware-based Aloha Partners for some $2.5 billion in cash.

Aloha had been using the wireless spectrum to test a mobile-TV service, Hiwire, based on the DVB-H transmission standard.

Under the deal, just approved by AT&T's board, AT&T will get spectrum licenses covering 196 million people in 281 markets, including 72 of the top 100 and all of the top 10 markets in the United States. The telco expects the deal to pass government approval and close within the next six to nine months.

The AT&T-Aloha transaction is the second deal in the past four months for wireless spectrum that was being used to test a mobile-TV service that could potentially compete with Qualcomm's MediaFLO, the live TV service already rolled out by Verizon Communications in some 30 markets and due to be marketed by AT&T later this year.

In July, Crown Castle International agreed to lease the U.S. nationwide 1670-1675 MHz spectrum it owns to two private-equity firms for a $13 million annual lease fee. That move essentially pulled the plug on Modeo, its DVB-H mobile-TV effort.

Aloha, the largest owner of 700-MHz spectrum, had been testing the Hiwire service in Las Vegas using its 12 MHz of spectrum (two 6-MHz channels) in partnership with satellite operator SES Americom and a number of content providers. Just last month, it struck a deal with $32.5 million cash deal with station group LIN TV for some 31 additional licenses in the 700-MHz band.

"Customer demand for mobile services, including voice, data and video, is continually increasing," said Forrest Miller, AT&T group president of corporate strategy and development, in a statement. "Aloha's spectrum will enable AT&T to efficiently meet this growing demand and help our customers to stay connected to their worlds."