Qualcomm said that it has agreed to sell its 700MHz US spectrum licences to AT&T for US$1.93 billion, with the operator stating that the transaction “will bolster AT&T’s ability to provide an advanced 4G mobile broadband experience for its customers in the years ahead.” The spectrum was used for Qualcomm’s aborted FLO TV mobile broadcast unit, with the company now stating that “it is expected that the FLO TV business and network will be shut down in March 2011.” The spectrum acquired covers more than 300 million people nationwide, including five of the top-15 US metropolitan areas – New York, Boston, Philadelphia, Los Angeles and San Francisco. Completion of the transaction is subject to regulatory approvals, and the deal is expected to be completed in the second half of 2011.

AT&T will use the frequencies to provide a supplemental downlink, using carrier aggregation technology. This is designed to deliver “substantial” capacity gains by enabling unpaired spectrum to be used in conjunction with paired spectrum. Qualcomm will integrate carrier aggregation support into its chipset roadmap and “intends to market the technology globally.” Qualcomm previously estimated that restructuring charges related to the FLO TV service would be in the US$125 million – US$175 million range in fiscal 2011. As a result of the AT&T transaction, it is anticipated that additional charges will be incurred related to the shut-down of the network and associated business exit costs. Graham Friend, Managing Director of Coleago Consulting, noted that Qualcomm paid US$558m for the licences, and that the sale price therefore represents a “stunning return” on the original investment. This also indicates that “mobile broadband provides the highest value use for mobile spectrum compared with at least one competing technological use.”