Monday, April 24, 2006

Aloha Partners: Largest Owner of 700MHz Spectrum

Via MocoNews, Aloha Partners teams with SES Global to develop mobile TV services.

From the post:

"SES seeks to carve out a niche in the rapidly-evolving mobile segment by using its satellites to beam music and TV channels to wireless transmission facilities on the ground. The programming is then slated to be further tailored to local markets and distributed to cellphone users or subscribers of other wireless networks.

A yearlong test is planned to begin this fall in Las Vegas, though negotiations with programmers and leading cellular providers still have to be worked out.

It is ambitious: the plans are to simultaneously distribute as many as 40 higher-resolution video channels directly to handsets, more than MediaFlo (20 channels) and Modeo (nine channels and uses DVB-H). Aloha has spent about $150 million over the past few years acquiring broadcast spectrum."

From a Aloha Partners white paper:

"The wireless industry has developed a short hand for comparing spectrum sales: the cost of each MHz sold divided by the population in the license area for that spectrum. This is known as the "cost-per-MHz pop."

For example, in July 2004, Nextwave sold 10 MHz of 1900MHz spectrum in Sarasota, Florida for $8.5 million. The cost-per-MHz pop for the Sarasota license was $1.25 ($8,500,000 /10 MHz/680,000 people). At the same time, Nextwave also sold 10 MHz of 1900MHz spectrum in New York City for $930 million. The cost-per-MHZ pop for the New York license was $4.60 ($930,000,000/ 10 MHz/20,202,000 people)."

The dramatic increase in spectrum values during the past seven years is due to three factors:
  • an 18-fold increase in minutes of use from 63 billion in 1997 to 1.1 trillion in 2004;
  • a 75 percent reduction in the network cost to provide incremental capacity from $.78 per minute in 1997 to $.09 per minute in 2004;
  • a nearly four-fold increase in the number of wireless customers from 55 million in 1997 to over 180 million in 2004; and
  • a 40 times increase in wireless data revenues from under $100 million in 1997 to over $4 billion in 2004."

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