Qualcomm Shutters FLO TV, Sells AT&T The Spectrum for $1.9 Billion

Written on:December 20, 2010
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FLO TV, Qualcomm’s mobile video network, is on its way into becoming a footnote in the mobile history. Today it said it will sell the the 700 MHz spectrum used to deliver the service to AT&T, after previously announcing it would shut down the service in March 2011.The San Diego-based chip maker is selling the spectrum to AT&T for $ 1.925 billion. AT&T said that is going to use the spectrum to bolster its next generation wireless broadband efforts. This is not the first time AT&T has bought the 700 MHz spectrum, the key to its LTE (Long Term Evolution) strategy – in 2007 they spent $ 2.5 billion on spectrum owned by Aloha Partners.

As part of the deal with Qualcomm, AT&T gets about 12 MHz spectrum of Lower 700 MHz D and E block spectrum in – New York, San Francisco, Boston, Los Angeles and Philadelphia and 6 MHz of Lower 700 MHz D block spectrum in rest of the country. The total FLO TV footprint covered about 300 million people. The deal will need approval from the FCC and other regulators. Qualcomm tried to find buyers for FLO, but it seems to have decided that selling spectrum was the best option.

“As part of its longer-term 4G network plans, AT&T intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology,” AT&T said in a news release. It is not clear when AT&T would start building networks based on this spectrum. The deal is likely to closed in the second half of 2011, so this looks almost like a 2012 buildout — roughly the time AT&T will start rolling out its LTE network at scale.

The bottom line is that this is a good strategic move by AT&T.  Just as it needed to bolster the bandwidth to the base-stations, companies like AT&T need more spectrum to deliver the bandwidth over the air to mobile consumers. The Dallas-based phone company was recently rated as the worst mobile phone company by Consumer Reports.

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