Qualcomm pulls the plug on FLO TV

Tools

Qualcomm (NASDAQ:QCOM) reportedly will shut down its struggling FLO TV mobile broadcast effort after attempts to find a buyer came up empty. Citing sources familiar with the situation, PaidContent reports FLO TV president Bill Stone told staffers late last week that Qualcomm will shutter its direct-to-consumer service by the end of 2010; the company is said to be in talks with U.S. operator partners Verizon Wireless and AT&T regarding the prospects of their respective white-label mobile TV services. At press time, Qualcomm had not responded to FierceMobileContent's request for comment.

FLO TV includes simulcast and time-shifted broadcast content from partners including ABC, CBS, NBC, Fox, ESPN, MTV and CNN. Subscriber numbers are unknown. Initially available only in limited markets, FLO TV went nationwide in mid-2009 in conjunction with U.S. broadcasters' long-planned transition to DTV, which freed up the necessary wireless spectrum. Qualcomm reportedly spent $683 million acquiring the spectrum to run FLO TV, stating it would invest about $800 million in total (including spectrum, network build-out and marketing costs) to launch the service.

Qualcomm first acknowledged plans to divest FLO TV in late July. Qualcomm chairman and CEO Paul Jacobs said at the time the company was exploring "a number of alternatives" for the unit, including discussions with prospective partners. "It will get done in the next year but I don't think I can be much more specific than that," Jacobs said. "A lot of interesting discussions. It's early days." At the company's Uplinq 2010 developer conference in San Diego a few weeks prior, Jacobs explained it was never Qualcomm's intention to become the service provider operating FLO TV--he also reiterated previous comments that it is likely the FLO solution will expand beyond its broadcasting focus into a more general data delivery platform for connected devices.

Speaking at the All Things Digital Conference in May, Jacobs admitted consumer adoption of FLO TV failed to meet Qualcomm's expectations. Talking to Bloomberg a few weeks later, FLO TV head Stone said the service's future would hinge on extending its parameters beyond television content into new solutions like electronic magazine delivery. "If it's only mobile TV, we're dissatisfied, we're not happy with it," Stone said. "There are going to be a lot of revenue streams off this service." According to Stone, FLO TV also needed to expand across a wider selection of handset models, noting that Qualcomm was working on an add-on antenna-like product that can be attached directly to phones, giving consumers the flexibility to migrate the service from device to device.

Stone also touted the FLO solution as a means for service providers and manufacturers to ease network bandwidth concerns--FLO technology transmits data across frequencies separate from those used by mobile networks, operating over the 716-722 MHz spectrum band in the U.S. "One person streaming a video takes up as much bandwidth as 100 cell phone calls," said Stone. "Networks break down and can't handle it. For me, whether I have one or 1 million users, it doesn't matter."

For more on FLO TV's fate:
- read this PaidContent article

Related articles:
Qualcomm in discussions to sell off FLO TV unit
FLO TV
: We need more phones, new services to succeed
Qualcomm CEO: FLO TV numbers 'not nearly what we expected'
FLO TV adds interactive features, time-shifted viewing

Filed Under