AT&T bulked up its wireless division today by purchasing a huge swath of wireless spectrum from Aloha Partners for $2.5 billion. The spectrum purchase — which covers 196 million people, including the top 10 U.S. markets and most of the top 100 — means AT&T can be less aggressive in next year’s FCC spectrum auction.
But does it also signal that companies are losing their appetite to invest in mobile TV? According to the Wall Street Journal ($), Aloha Partners’ Hiwire division “had expressed plans to launch a nationwide mobile TV service once it struck a deal with a major partner in the wireless, cable or Internet space” and was running a test network with T-Mobile in Las Vegas. Aloha is the second mobile TV outfit to sell off its spectrum in recent months; In July, mobile phone tower company Crown Castle International scrapped its plans for Modeo, a mobile TV startup running a test network in New York City, and leased its spectrum to private equity firms.
What will AT&T do with the new spectrum?
AT&T’s purchase also includes Hiwire’s assets, so the carrier could easily set up its own mobile broadcast TV network. (AT&T also has a deal with Qualcomm to offer its MediaFlo mobile TV service, but it hasn’t gone on sale yet.) But spokesman Michael Coe says the company hasn’t decided yet whether to use it for “one-way” broadcast TV or a mix of “two-way” voice and data, which could be used to transmit both wireless Web access and on-demand video clips.
Our money is on the latter. Carriers, which need to sell more data and entertainment services to make up for declining phone-call revenue, often tout broadcast-quality mobile TV as one of the next big things. But it hasn’t taken off yet with consumers. According to research firm M:Metrics, just 0.6% of U.S. mobile subscribers watched broadcast TV programming on their phones once or more per month this summer. That’s partially because only a few phones currently support mobile broadcasts. But we also think it’s because mobile viewers are more interested in bite-sized, YouTube-like clips (which 1% of mobile subscribers watched) and short video messages sent from friends and family (which 2.7% of subs watched), not long TV episodes on rigid schedules.