AT&T spends $2.5bn on 700MHz spectrum

US cellco AT&T paid out $2.5bn for a swathe of spectrum in the 700MHz band on Tuesday, positioning the carrier to offer new data services such as mobile TV.

AT&T is acquiring the spectrum from Aloha Partners – “the largest owner of 700MHz spectrum in the US”.

As part of the deal, AT&T will also get its hands on Hiwire, an Aloha owned company piloting DVB-H mobile TV broadcasts in Las Vegas. Hiwire’s plan is to have the TV service resold by carriers in the area.

The move could take AT&T head to head with Qualcomm spin off, MediaFLO USA, which operates its own nationwide mediacast network in the 700MHz band.

Based on the US chip shop’s own Forward Link Only (FLO) technology, MediaFLO allows operators to deliver mobile interactive multimedia to their customers without the cost of network deployment and operation.

But AT&T’s move also raises questions over the relationship between the carrier and Qualcomm. In February, AT&T signed an agreement with MediaFLO USA, announcing plans to deliver mobile TV services by late 2007.