Qualcomm has announced that it has agreed to sell its lower 700 MHz spectrum licences to AT&T for $1.925 billion (€1.464 billion). The sale follows Qualcomm’s previously announced plan to restructure and evaluate strategic options related to the Flo TV business.
It is expected that the Flo TV business and network, operated by Flo TV Incorporated, a wholly owned subsidiary of Qualcomm, will be shut down in March 2011.
AT&T announced today that as part of its longer-term 4G network plan, it intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology. This technology is designed to deliver substantial capacity gains by enabling unpaired spectrum to be used in conjunction with paired spectrum.
Qualcomm is integrating carrier aggregation technology into its chipset roadmap to enable supplemental downlink and intends to market the technology globally. This new technology is expected to create opportunities around the world in markets where unpaired spectrum bands can be made available for wireless operators to use in conjunction with existing paired bands to obtain substantial improvements in their mobile broadband networks.
“This is a positive outcome for Qualcomm and our stakeholders,” said Paul Jacobs, chairman and CEO of Qualcomm, in a statement. “Carrier aggregation, supplemental downlink and LTE multicast technologies are an exciting evolution of next generation wireless systems to economically support increasing consumer demand for mobile TV and other rich media content. We will continue to drive the development and delivery of these new capabilities, which build on our technology leadership and deep experience with 3G, 4G and broadcast technologies.”
Restructuring charges related to the Flo TV service business were previously estimated to be in the range of $125 million to $175 million in fiscal 2011, primarily related to certain contractual obligations, with the potential for additional charges depending on the outcome of the evaluation of strategic options for the business. As a result of this agreement to sell the spectrum licenses, it is anticipated that additional charges will be incurred related to the shut down of the Flo TV network and associated business exit costs.
