Qualcomm [NASDAQ: QCOM] has agreed to sell it’s FLO TV mobile broadcast solution to AT&T [NYSE: T] for $1.92 billion. The spectrum underlying FLO TV is in the lower 700 MHz frequency band, and spans more than 300 million customers across the United States. AT&T stated they intend to deploy the spectrum as a supplemental down-link in conjunction with their 4G mobile broadband network rollout, to leverage the resulting capacity gains to fulfill rich media content demand. The companies plan for the transaction to close in the 2nd half 2011.
It was reported that Qualcomm spent $683 million to acquire the FLO TV spectrum, which covers over 70 million people in New York City, Boston, Philadelphia, Los Angeles and San Francisco (12 MHz of D and E block spectrum) along with more than 230 million people across the rest of the country (6 MHz of D block spectrum). Qualcomm claims they have invested a total of about $800 million between spectrum, network development and marketing to launch the FLO TV network with fewer than 1 million customers sign-ups. Qualcomm is anticipating additional costs between $125 and $175 million in fiscal 2011 from their exit from the FLO TV business.
FLO TV features both live and time-shifted broadcast content from providers including ABC, NBC, CBS, Fox, ESPN, CNN and MTV. FLO TV was only available to limited markets initially, but went nationwide in mid-2009 in conjunction with the fundamental transition from analog to digital. Qualcomm will terminate FLO TV services on March 27.