Oct 11, 2007 2:56 PM, By Donny Jackson

AT&T this week announced a deal to pay $2.5 billion in cash for 12 MHz of spectrum held by Aloha Partners in the 700 MHz band.

Under the agreement, AT&T will receive Aloha’s paired spectrum from 710-716 MHz and from 740-746 MHz. The spectrum covers 196 million people in 281 markets, including 72 of the top 100 markets, according to AT&T.

“That’s all the spectrum that we own,” said Aloha executive Scott Wills. “In addition, AT&T bought the rights to purchase Hiwire, which is our mobile TV operation.”

Wills, who serves as president and COO of Hiwire, said Aloha Partners will cease to exist when the deal is completed but did not dismiss the notion that the money from the AT&T deal could be used in other ventures.

“That’s clearly possible, but not as Aloha,” Wills said.

With the deal—expected to close in six to nine months—AT&T gains a foothold in the band prior to the 700 MHz auction, which the FCC recently rescheduled to begin on Jan. 24.

“It makes it much easier for them [AT&T] to have a nationwide license just with the A and B blocks, instead of going with the C or D,” said Roger Entner, senior vice president of communications for IAG Research. “So this really gives them a significant advantage in the upcoming 700 MHz auction. … It definitely shows that they’re going to be a serious bidder.”

An AT&T executive said in a statement that the new airwaves will help the carrier meet growing expectations in the market.

"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. "Aloha's spectrum will enable AT&T to efficiently meet this growing demand and help our customers stay connected to their worlds."

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