Qualcomm confirms Flo TV switch-off and sells spectrum to AT&T

Californian technology firm Qualcomm has announced that it is to wind down its mobile TV service, Flo TV, and sell the spectrum in which the service operated to US carrier AT&T fro $1.925bn. It has been expected for some time that Flo TV would be shut down because of weak sales. However,  Qualcomm had suggested that it might reposition its mobile TV broadcast network as a supplemental offering for US operators for the transmission of mobile data. The sale of the spectrum to AT&T indicates that this alternative was not viable for Qualcomm.

Qualcomm had a direct-to-consumer offering for its Flo TV service, which laumched in 2009. It warned in October that this sales of this service were being suspended, with guarantees of continuing services for existing customers extended only until spring 2011. At that time Qualcomm said its Flo services offered through partnerships with AT&T and Verizon Wireless would be unaffected. But now it has confirmed that all services are expected to cease in March 2011.

The unpaired spectrum, which comprises eight licences in the Lower 700MHz D and E Block, covers more than 300 million people across the US, AT&T said. The carrier said it would use its new spectrum as supplemental downlink, using carrier aggregation technology. It said it would deploy the spectrum once compatible handsets and network equipment have been developed. Carrier aggregation technology is expected to be enabled with the completion of 3GPP Release 10.

Qualcomm said that it will integrate the new technology into its chipset roadmap and will market it globally, offering a silver line to the cloud of having to switch off Flo TV. Easing the pain yet further is the price that Qualcomm has secured for its spectrum. Graham Friend, managing director of Coleago Consulting, which specialises in spectrum auctions, noted that Qualcomm acquired its eight licences at auction for $558m, meaning that it has secured a return of 244 per cent on its original investment. Friend described this as a “stunning return”.