AT&T; to buy more airwaves

AT&T; Inc. said Tuesday that it had agreed to buy airwaves from Aloha Partners for $2.5 billion to add capacity for wireless video and text messaging as revenue from land-line customers declined.

The airwaves cover areas with 196 million potential customers, including cities such as New York and Los Angeles. The purchase of Providence, R.I.-based Aloha should close in six to nine months.

Mobile-phone companies are buying more wireless spectrum to accommodate customers’ spending more on data services, including video and music downloads.

Last quarter’s revenue from those features grew more than four times faster than AT&T;’s whole wireless business. The purchase will bolster the company’s network capacity in 72 of the top 100 U.S. markets.

“This allows them to provide more capacity to more customers,” said Christopher Larsen, a Credit Suisse analyst in New York. “This spectrum has very few practical limitations.”

AT&T; will use the airwaves from privately held Aloha for either video or voice and data services, spokesman Michael Coe said.

Chief Executive Randall Stephenson has relied on wireless revenue for growth as home-phone customers switch to mobile phones or digital voice plans from cable companies. AT&T; lost 1.38 million residential phone lines in 2006, excluding connections gained through its BellSouth Corp. purchase.

Revenue from wireless data advanced 67% in the second quarter from a year earlier.