Qualcomm confirms it will exit MediaFLO

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Qualcomm confirms it will exit MediaFLO

Mobile TV venture has not delivered expected returns, but spectrum has high value

By CAROLINE GABRIEL

Published: 23 July, 2010

READ MORE: Spectrum | US | Qualcomm | Media FLO

Qualcomm has confirmed that it is looking to exit its MediaFLO mobile TV venture, which has not lived up to heady expectations. The chip giant acquired 700MHz spectrum in the US to build a wholesale TV network, used by several carriers to deliver broadcasts to mobile devices. But results have been less impressive than Qualcomm had hoped, and plans to diversify into new geographies, and new applications like general content delivery, have borne little fruit.

Now, after weeks of speculation, CEO Paul Jacobs says Qualcomm is looking at options for MediaFLO. On the earnings call, he said: "With respect to our FLO TV business, we're engaged in discussions with a number of partners regarding the future direction of the business. We are considering a number of alternatives and we will update you as appropriate." Action is likely to be taken this year.

One option might be to shutter MediaFLO itself and sell on the licenses and tower assets - 700MHz is seen as beachfront spectrum in the US, and both Verizon and AT&T will build their initial LTE networks there. Jacobs made clear, in an interview with GigaOM, that he would rather keep MediaFLO as a content system. He said: "We want to see FLO continue so it's not like we'd want to sell the spectrum, but there are certainly people who would buy it for the spectrum. The spectrum is extremely valuable."

Qualcomm always intended to sell MediaFLO eventually - its usual route when it invests in spectrum and builds networks. The same pattern will be seen in India, where it will work with local partners to create a TD-LTE system in the 2.3GHz spectrum it recently acquired and then will sell the business on once established. However, it would have hoped to make more return on its investment in FLO before exiting. "We put FLO TV operations into our strategic investments for financial reporting because we always intended to get out of the operator business. …. It's not operating the way we want it to - it's not necessarily our core business, so we're looking at our options," Jacobs said in the same interview.