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AT&T Buys 700 MHz Spectrum Licenses

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[qi:045] As Google (GOOG) and Verizon (VZ) duke it out over the forthcoming 700 MHz spectrum auction, AT&T (T) has decided to spend the money and buy its way into the market. The company has announced that it is acquiring licenses in the 700 MHz spectrum from Aloha Partners, a privately-held spectrum speculator, for about $2.5 billion.

The licenses cover roughly 196 million POPs in 281 markets, including 72 of the top 100 and all the top 10 markets in the U.S., according to the AT&T press release. UBS analysts estimate that this works out to about $1.06/MHz/POP, which is twice the price paid last year as part of the AWS auctions.

The upcoming auction in the A and B spectrum blocks has reserved prices of $0.50/MHz/POP and $0.38/MHz/POP. UBS expects that will rise to at least $1/MHz/POP. AT&T just set that price.

Related Posts:

  1. Inside the 700 MHz landgrab
  2. 700 MHz Explained in 10 Easy Steps

7 Responses to “AT&T Buys 700 MHz Spectrum Licenses”

  1. Jesse Kopelman

    Om, there was never any doubt that the A and B blocks were going for over $1/pop/MHz. After all, the FCC valued that 1.9 GHz spectrum they swapped to Nextel at close to $2/pop/MHz. I’d be surprised if the A block doesn’t fetch similar numbers. Also, wasn’t AT&T one of the financiers behind Aloha Partners, anyway. I swear they were backed by the old AT&T Wireless. In reality, this may be a bit of an accounting move.

  2. Jesse Kopelman

    Dylan, you skipped a step. We are talking the price per pop/MHz. So take your $12.5/pop and divide that by 12MHz. You and up with $1.04/pop/MHz which is just a rounding error away from Om’s $1.06 . . .

  3. Unless my math is really suffering, $2.5 billion divided by 196 million people is $12.50 per person. Granted, most of it is in major markets. The spectrum just sold by Aloha was originally purchased in auction for about $43 million plus $10 million (Cavalier) plus $5 million (DataCom). The average per-person price in the original auction was about $0.50.

    Dylan Oliver
    Primaverity LLC