AT&T Buys $2.5 Billion in 700Mhz Spectrum Licenses

AT&T's agreed to drop $2.5 billion into the pockets of Aloha Partners for a sizable chunk of the 700Mhz spectrum—12 megahertz worth covering 196 million people in 281 markets. It's the same frequency that the FCC will be auctioning off licenses to in just a couple of months. AT&T says they haven't decided what they're going to do with it yet—but honestly it seems like they'd have an idea of what they wanted to do with something they paid $2.5 billion for.

Mobile video or expanded data services seem most likely. Regardless, they'll have time if they're truly undecided since they won't get their hands on it until at least 2008, when the deal closes, with some of it tied up until 2009. It'll be interesting to see how aggressively they bid in the upcoming auction, considering the coin they just dropped—is this move a way to sidestep the uncertainties of the auction (which Verizon clearly plans on diving into, hard) or are they planning on scooping up even more? We'll know soon enough. [Yahoo!/AP]