Qualcomm has just announced that it has agreed to sell its Lower 700 MHz D and E Block U.S. spectrum licenses to AT&T for a whopping $1.925 billion, following its previously announced plan to restructure and evaluate strategic options related to its FLO TV business.
The company expects to shutter its FLO TV business and network in March 2011.
According to AT&T, the spectrum covers more than 300 million people total in the United States: 12 MHz of Lower 700 MHz D and E block spectrum covers more than 70 million people in five of the top 15 U.S. metropolitan areas — New York, Boston, Philadelphia, Los Angeles and San Francisco – while 6 MHz of Lower 700 MHz D block spectrum covers more than 230 million people across the rest of the nation.
AT&T says it intends to deploy the acquired spectrum as supplemental downlink for its 4G network, using carrier aggregation technology, which is designed to deliver substantial capacity gains by enabling unpaired spectrum to be used in conjunction with paired spectrum.
The company says it expects to begin deploying the spectrum as soon as compatible handsets and network equipment are developed.
Completion of the spectrum transaction is subject to the satisfaction of customary closing conditions, including approval by the FCC and clearance from the U.S. Department of Justice.
Qualcomm and AT&T anticipate closing the sale during the second half of calendar 2011.
Restructuring charges related to the FLO TV service business were previously estimated to be in the range of $125 million to $175 million in fiscal 2011. As a result of the agreement to sell the spectrum licenses to AT&T, Qualcomm anticipates additional charges will be incurred related to the shutdown of the FLO TV network and associated business exit costs.