Qualcomm Sells 700MHz Spectrum to AT&T for $1.925bn

Qualcomm has agreed to sell its Lower 700MHz D and E Block (Channel 55 and 56) unpaired US spectrum licenses to AT&T for $1.925bn (£1.24bn), with the deal expected to be closed in second half of 2011. The company has also confirmed that its FLO TV business will shut down, with the divison expected to cease trading in March 2011.

AT&T plans to use the spectrum as supplemental downlink as part of its longer-term 4G network plan. The operator says the 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. The company says it expects this new technology 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.

Qualcomm also says it plans to take advantage of its experience in broadcast technology to develop LTE multicast technologies that address the rapidly growing demand for high-bandwidth video and other multimedia content.

Qualcomm chairman and CEO, Paul Jacobs described the move as “a positive outcome for Qualcomm and our stakeholders,” saying: “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 – $175m in fiscal 2011, primarily related to certain contractual obligations.  As a result of this agreement to sell the spectrum licences, Qualcomm anticipates that additional charges will be incurred related to the shut down of the FLO TV network and associated business exit costs.