Qualcomm mulls over future of FLO TV
November 16, 2010
Qualcomm already made it official that it intends to shut down its FLO TV service, due to its low adoption rates. The company had invested more than three-quarters of a billion dollars, but was felled by a paucity of FLO TV devices and the cost of marketing to potential customers, among other factors.
Apparently shutting down FLO TV isn’t as simple as it sounds, in large part because of its white-label service for AT&T and Verizon Wireless, whereby the carriers buy the service for wholesale to resell to consumers who buy FLO TV-compliant handsets. That doesn’t mean that Qualcomm is reneging on its promise to shutter the unit; it has inked a restructuring plan that will incur additional costs of $125 million to $175 million in 2011.
FLO TV continues to talk to potential partners for the network and says there is strong interest in using the spectrum because of the growing congestion on existing telco networks. With the increasing availability of tablets, an increasing amount of rich media is eating up bandwidth, which could be eased by FLO TV’s 700MHz broadcast spectrum.
In addition to discontinuing the entire operation, Qualcomm posited that other options include operating the FLO TV network under a new wholesale service, selling the service or a joint venture with a third party. Verizon Wireless has already stated that it is not interested in buying the FLO TV spectrum.