AT&T Pre-empts Auction and Buys Large Spectrum Chunk

Reports from the US indicate that AT&T has won the right to buy a block of much sought-after 700MHz spectrum in a US$2.5 billion deal. The Federal Communications Commission has apparently approved the giant operator's purchase of Aloha Partners and its spectrum holdings.

AT&T is already the largest mobile player in the US and the purchase will add new spectrum covering 196 million people in a total of 281 domestic markets. The FCC noted that the Aloha block of spectrum sits right next to the blocks of airwaves that the Commission itself is currently auctioning. The FCC is selling off 62 MHz of spectrum in the 700MHz range, while Aloha owned a 12MHz block.

Rhode Island-based Aloha acquired its licences in previous FCC auctions and in the secondary market between 2003 and 2005. Apart from some very limited field and market trials, the company never used its airwaves to build a wireless network. AT&T has some 63.7 million cellular phone customers.

The FCC auction is expected to raise about US$10 billion for the Federal government as it sells off the frequencies that will be handed back by TV broadcasters who are now moving onto digital signals. The sale includes a stellar list of participants among them Cablevision, Echostar Communications Group, Qualcomm and Google.