AT&T to buy spectrum from Aloha for $2.5 billion

NEW YORK (Reuters) - AT&T Inc, the biggest U.S. mobile service, said on Tuesday that it would buy the wireless airwave licenses of privately held Aloha Partners LP for about $2.5 billion.

AT&T said the licenses have coverage for a potential 196 million customers in 281 markets, including 72 of the top 100 U.S. markets in the 700-megahertz frequency band.

Providence, Rhode Island-based Aloha had been testing the airwaves in Las Vegas for a mobile television service that could potentially compete with an offering from Qualcomm Inc unit MediaFlo USA. It had also tested wireless high-speed data services in Phoenix.

AT&T spokesman Michael Coe would not say how the acquisition might affect AT&T's decision about whether to participate in an upcoming government airwave auction.

Coe said AT&T had yet to determine what services it would run over the airwaves.

"We'll look at which option makes sense for AT&T and our customers," he said. "We'll either use the spectrum for broadcast video or two-way communication like voice, data or on-demand content."

AT&T said it anticipated receiving necessary government approvals and closing the transaction within six to nine months.

(Reporting by Sinead Carew and Franklin Paul)