AT&T's Aloha Purchase May Alter 700 Mhz Landscape

Bernie — Wed, 10 Oct 2007 10:51:12 -0400

AT&T’s announced purchase of Aloha Partners 700 Mhz spectrum for $2.5 billion may alter the competitive landscape for both mobileTV and mobile broadband. The implications impact companies like Qualcomm on the mobileTV side as well as smaller regional and rural carriers who intend to participate in the upcoming 700 Mhz spectrum auction (more on this point later). Aloha’s subsidiary, HiWire was poised to be a leading mobileTV operator in the U.S., utilizing the DVB-H standard. AT&T has committed to offering mobileTV as well, but through Qualcomm’s MediaFLO platform, a competitor to HiWire and DVB-H. The question on everyone’s mind is will AT&T forgo mobileTV with its newly acquired Aloha spectrum, and use it instead for mobile broadband purposes. Regardless of AT&T’s intentions, the removal of HiWire from the mobileTV competitive landscape is potentially good news for Qualcomm and MediaFLO.

This development also complicates the already complex jockeying for the upcoming 700 Mhz auction, scheduled to take place on January 24, 2008. This pre-emptive move by AT&T signals they intend to be a major player in 700 Mhz. The 12 Mhz of spectrum (C block of the lower band) the Aloha purchase provides AT&T is not adequate enough for a robust nationwide network. That implies that AT&T intends to gain additional spectrum at the auction, and because of Aloha’s band placement, may “muddy the waters” as to where the players will fall. AT&T is kind of a wild card now, because they may want to expand their holding in the lower 700 Mhz band, which pairs nicely with the Aloha spectrum assets. That would be somewhat of a new development, because previous thinking had the larger players like AT&T and Verizon more interested in the upper band 700 Mhz spectrum. The lower band is attractive to smaller regional and rural carriers because the auction rules has the lower bands broken into smaller geographic regions, whereas the upper band is broken into much larger geographic regions, and thus more attractive to larger national providers. But AT&T may now see the lower band, smaller geographic license areas as attractive, and simply outbid regional and rural carriers. Many of those smaller carriers were looking to the 700 Mhz auction as a way to get a foothold in the mobile broadband arena. There is potential that they may not get that opportunity now. If AT&T does decide to swallow the lower band, they could remove the potential for many additional mobile broadband carriers to emerge after the auction, thus significantly altering the competitive landscape for mobile broadband.

MobileTV Gaining Momentum

Bernie — Wed, 26 Sep 2007 09:22:11 -0400

The U.S. is the unofficial king of couch potato syndrome. Fitness enthusiasts swear that syndrome contributes to the obesity problem in the U.S. Despite numerous strategies, we as a nation can’t seem to get off the couch and stop watching TV. That is until now. Maybe the answer to curbing the couch potato syndrome is to leave the TV part in the equation. Hence MobileTV. According to an RCR Wireless News article, mobileTV is firmly off the ground and coming to a handheld near you soon. So, you will soon be able to get off the couch, but keep the TV. One of the more interesting scenarios around MobileTV is its competitive implications

The RCR article featured a comparison between Hiwire and MediaFLO, the two most established mobileTV options in the U.S. Hiwire is owned by Aloha Partners, the largest owner of 700 Mhz spectrum in the U.S (at least for now) and uses the DVB-H standard. MediaFLO was developed by Qualcomm and has been established as a Qualcomm business unit. There is a natural competitive rivalry between these two providers, but the implications go beyond just the two of them. What remains to be seen is how mobileTV will be positioned in the marketplace. Will it simply be a feature offered by all major wireless carriers, or will stand alone mobileTV companies emerge that offer a compelling entertainment on the go service alone. Taking it a step further, will mobileTV mature to a legitimate competitor to home cable/IPTV/DBS service? Will smartphones or mobile media players some day also function as a STB for my home television? Some day in the not too distant future, mobileTV services may contribute to ditching "landline" television service, in much the same way that mobile wireless is eroding landline telephone service today. It's difficult to see a day when mobileTV will be robust enough to rival today's landline subscription television service. But maybe it doesn't have too. Maybe a significant number of consumers will get "just enough" from mobileTV to cut the television cord. No one knows the answers to these questions. There are a lot of smart people who will predict many things. But as always, the future is decided by paying consumers. It will be fun to watch. And in this case, thanks to mobileTV, we can watch it wherever we happen to be.