Qualcomm, AT&T Discussing Possible FLO TV Spectrum Sale

An interesting report from Bloomberg this week suggests AT&T and Qualcomm may presently be in talks regarding a possible FLO TV spectrum sale.

Qualcomm Inc. has held talks with AT&T Inc. over the possible sale of spectrum the chipmaker acquired for its mobile-television service, according to two people with knowledge of the discussions.

Within a five year span (2003 to 2008) Qualcomm paid $683 million for rights to use the 700 megahertz spectrum in federal auctions. Qualcomm launched Flo TV six years ago as a way to enable users to enjoy broadcast television on their mobile phones. Ultimately, however, as the Bloomberg report reminds us, Qualcomm decided to bring a halt to Flo TV sales after it “struggled to attract subscribers.”

Just this week, Qualcomm CEO Paul Jacobs said numerous options for the Flo TV business are being considered, not the least of which is potentially “selling the spectrum.”

Based on a valuation last month from Mark McKechnie, a Gleacher & Co. analyst, the spectrum could generate as big of a payout as $1 billion, as the spectrum covers the U.S. in 6 megahertz blocks.

“It’s got to be worth more now; they got that spectrum before the iPhone came out,” McKechnie told Bloomberg.

Another clear indication that Qualcomm is eager to move past FLO TV is that during the company’s recent 2010 developer conference, Jacobs reiterated that “it was never the firm’s intention to become the service provider operating the FLO broadcast network.”