Monday 26 July 2010

Qualcomm probably given up on Mobile TV idea

Bad news for Mobile TV proponents and supporters.

Qualcomm apparently is in talks to sell off its struggling MediaFLO digital mobile TV business, executives said in a conference call on Wednesday.

The announcement came during the conference call accompanying Qualcomm's third-quarter earnings. Qualcomm reported net income of $767 million, up 4 percent from a year ago, on revenue of $2.71 billion, which decreased 2 percent over the same period a year ago.

During the call, Qualcomm chief executive Paul Jacobs announced the new direction for its MediaFLO business, a subsidiary of Qualcomm. MediaFLO brands its digital mobile television service as FLO TV. Qualcomm had saddled the business with a three-year, nonrefundable prepaid service agreement, which apparently hasn't helped MediaFLO's prospects.

"With respect to our FLO TV business, we're engaged in discussions with a number of partners regarding the future direction of the business," Jacobs said, according to a transcript by Seeking Alpha. "We are considering a number of alternatives and we will update you as appropriate."

This news comes at a time when Mobile TV business as a whole is not doing very well. Couple of weeks back I blogged about Mobile TV in China which has not been as successful as initially thought.

Qualcomm was one of the early proponents on another technology called MBMS. Couple of years back they decided to back MediaFLO and not focus much on MBMS. They bought the 700MHz spectrum in the US and launched nationwide TV network. This is also used by other carriers to deliver broadcasts to their devices.

In fact just a few months back they were pushing their standalone FLO TV device. Anyway, it seems they have probably given up on Mobile TV idea like a lot of others who dont see much return for the investment in Mobile TV. The average person is happy and content just to be able to watch Youtube on their mobile.

The following is from Rethink Wireless:

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.

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