From: Reuters
Published April 3, 2008 09:28 PM

AT&T sees strategic success in U.S. wireless auction

By Peter Kaplan

WASHINGTON (Reuters) - AT&T Inc <T.N> said on Thursday the $6.64 billion worth of additional airwaves it acquired in a government auction last month would allow the company to make a strong move into the next generation of wireless services.

Speaking for the first time about the landmark auction since it ended on March 18, AT&T said it would use its new 700 megahertz spectrum to enhance the quality and reliability of existing wireless broadband and voice services and position the company to roll out more advanced wireless broadband in coming years.

"We will put our spectrum to work so that customers can do more with their wireless devices, the user experience is superb, and wireless connectivity can be embedded in more devices," Ralph de la Vega, chief executive of AT&T's wireless unit, said in a statement.

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AT&T won 227 regional licenses around the United States in the auction, run by the Federal Communications Commission.

AT&T said on Thursday that, with the additional airwaves, its 700 MHz spectrum would cover the top 200 U.S. markets and 87 percent of the U.S. population.

The 700 MHz airwaves are considered valuable because they travel long distances and penetrate thick walls. They are being returned by television broadcasters as they move to digital from analog signals in early 2009.

AT&T's comments came shortly after the expiry of anti-collusion restrictions in effect during the auction that barred carriers from discussing the auction results.

AT&T and rival Verizon Wireless won the lion's share of the spectrum up for grabs in the $19.12 billion auction, with Verizon spending $9.63 billion.

Verizon Wireless, a joint venture of Verizon Communications <VZ.N> and Vodafone Group Plc <VOD.L>, was scheduled to hold a presentation for analysts and investors on Friday morning to discuss the auction results.

AT&T said it would combine its new airwaves with a large piece of 700 MHz spectrum it gained this year in its $2.5 billion acquisition of Aloha Partners.

Broadband traffic on AT&T's network has quadrupled every year since 2004 due to faster broadband speeds and new wireless applications such as live video sharing, social networking and business applications, the company said.

AT&T said the new spectrum was also attractive because it was not burdened with many regulatory requirements imposed on a nationwide block of spectrum that Verizon won in the auction.

In a telephone briefing with reporters, AT&T executives said the company's existing spectrum was adequate to enhance its wireless service over the near term.

Over the longer term, they said the 700 MHz spectrum would provide the "foundation" for rolling out advanced broadband platforms that would allow even faster wireless speeds, which they estimated would start to become available around 2012.

Another company that picked up spectrum in the auction, Qualcomm Inc <QCOM.O>, also issued a statement on Thursday, saying it had acquired eight licenses in the auction covering the Boston, Los Angeles, New York City, Philadelphia and San Francisco areas for a total of $558.1 million.

Qualcomm said the new spectrum doubles its 700 MHz spectrum holdings throughout an area with more than 68 million people in 28 individual markets. It said the spectrum would enhance its MediaFLO mobile television service in those markets.

(Editing by Braden Reddall)

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