Owner of a huge slice of wireless spectrum teams with satellite firm to beam TV via cell phones.

April 24, 2006

The business of broadcast-quality programming on mobile devices picked up a new player with the announcement on Monday that Aloha Partners will team with satellite operator SES Americom to air mobile TV in Las Vegas this fall.

Aloha Partners, a Providence, Rhode Island company, owns a large allotment of 700 megahertz (MHz) spectrum in the United States as a result of its purchases of valuable frequencies at Federal Communications Commission auctions in 2001 and 2003.

The company, which is funded by a number of well-heeled individual investors, also acquired spectrum from other owners.

Among Aloha’s investors are Amos Hostetter, the founder of Continental Cablevision; Bob Hughes, the founder of Prime Cable; and Burt Staniar, former chief executive of Group W Cable.

The company currently owns 12 MHz capacity of UHF spectrum covering 60 percent of the U.S., concentrating coverage in all of the top 10 markets and 80 percent of the population in the top 100 markets.

Through its Hiwire Mobile TV service, Aloha will team with SES Americom, the U.S. subsidiary of SES Global, the largest satellite operator in the world, to deliver digital video broadcast-handheld (DVB-H) mobile TV and entertainment in the trial service later this year.

MediaFLO Competition

Aloha Hiwire will compete with Qualcomm’s MediaFLO technology. Qualcomm announced in February that it will use Intelsat to provide transport services to the towers of its mobile broadcast television network (see Intelsat to Carry Qualcomm TV).

Last December, longtime partners Qualcomm and Verizon Wireless said they would introduce broadcast-style TV service on cell phones to the U.S. Qualcomm eschewed the DVB-H standard, which is popular in Europe, in favor of its own, MediaFLO.

The MediaFLO service on Verizon Wireless is scheduled for testing later this year, with a commercial launch slated for next year. The phone company said it expects to launch the service over approximately half the markets covered by its EV-DO (evolution data optimized)-based broadband network.

A third U.S. competitor, Crown Castle, is building a network based on DVB-H that will compete with Qualcomm’s MediaFLO and Aloha Hiwire (see Crown Castle Intros Mobile TV).

“We think DVB-H will be the global standard and Crown Castle is offering their service at 1,600 MHz, and I don’t think that’s going to be as successful a frequency to do this at as 700 MHz,” said Scott Wills, president and chief operating officer of Hiwire.

According to Mr. Wills, 700 MHz offers in-building penetration, while 1,600 MHz does not, so it is much more expensive to build a network at the latter frequency, to the tune of several billion dollars versus a half billion dollars for 700 MHz.

Analog-to-Digital Transfer

Aloha was able to purchase its spectrum because efficiencies resulting from the emergence of digital technology have freed up significant swaths of valuable spectrum. As a result, the U.S. government is auctioning off considerable amounts of spectrum.

“Qualcomm has only one channel, Channel 55, with 6 MHz of bandwidth. We have two channels, Channels 54 and 59, so we can afford to clear more markets because we have two channels to work with,” said Mr. Wills.

“We have fewer broadcasters adjacent to our channels than Qualcomm has to its channels,” he added. “Qualcomm has far fewer points of presence than we do.”

Mr. Wills, who helped launch the Arts and Entertainment network and the Montel Williams Show, said Aloha is seeking deals with wireless networks such as Verizon Wireless and Cingular.

Programming will be beamed via satellite to Aloha’s towers around the country. Aloha will use SES’s network operations center for its program management.

“This jump-starts us from a programming perspective and from a technology platform perspective,” Mr. Wills said.