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After shutting down its ailing FLO TV wireless video service in October, Qualcomm announced today that it will be selling the service’s precious 700 megahertz wireless spectrum to AT&T for around $1.9 billion to bolster its 4G network.
The deal, which is still pending regulatory approval, is perhaps the best possible outcome for Qualcomm, which never managed to find success with FLO TV. The company learned the hard way that consumers would rather watch video on their phones rather than buy a new device that requires a monthly fee. It’s also a coup for AT&T, which needs to scrape up as much wireless spectrum as possible to strengthen its upcoming LTE 4G network.
Qualcomm’s block of spectrum covers more than 300 million people across the country, including major cities like New York, Boston, Los Angeles and San Francisco. AT&T says that it intends to use the spectrum to increase the downstream speed and total capacity of its 4G network. The company will utilize carrier aggregation with the spectrum, a technology for LTE 4G networks that allows networks to use multiple frequencies to achieve high speeds, to combine its existing spectrum with Qualcomm’s.
Verizon recently launched its 4G LTE network, which serves around 110 million users. There aren’t any LTE phones available yet, but the company has a few 4G USB modems available. Verizon boasts that it has the largest contiguous swath of 700 MHz wireless spectrum in the continental US, meaning its network is already expansive without patching in multiple spectrum blocks. It’s not yet clear how AT&T’s LTE network will compete. AT&T is expected to launch its 4G LTE network some time in 2011.
AT&T says it will begin deploying the new spectrum once its handsets and networking equipment are ready. Both Qualcomm and AT&T expect the sale to close in the second half of 2011.
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