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700 Mhz Auction: Looking Pricier and Pricier

Yesterday, AT&T shelled out a cool $2.5 billion to buy Aloha Partners?700 Mhz spectrum. This purchase price could have huge implications for a wireless airwaves auction slated for early 2008, when more 700 Mhz spectrum will become available for sale.

This price tag means that bid amounts in that auction will go through the roof. Sure, that’s been understood ever since Google pledged to bid $4.6 billion, subject to certain conditions.

But I don’t think most people realize yet just how high the auction prices could go. According to estimates by Stifel Nicolaus, AT&T paid double the price of bidders for a different chunk of spectrum in Auction 66 a year ago. And Auction 66 drummed up the highest amount of funds ever raised in a wireless auction.

Could the upcoming 700 Mhz spectrum auction break that record? I believe that that’s very likely, for yet another reason: Blair Levin, an analyst with Stifel, believes that AT&T’s purchase of Aloha’s spectrum could mean that the telco is interested in beefing up its 700 Mhz spectrum holdings further — and will be an aggressive bidder in the upcoming auction as well.

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