What to Do About FLO TV?
On Qualcomm's fourth-quarter earnings call, CEO Paul Jacobs said the company was commencing a restructuring plan to exit the FLO TV service business and he suggested a few options:
"Possibilities range from a new wholesale model, sale or joint venture with the third-party and/or sale of the spectrum licenses and discontinuance of the operation of the network," he said on the call. (See Qualcomm Posts Q4.)
Jacobs has made it clear in the past that Qualcomm never wanted to be the service provider of FLO TV, just the technology backbone. But, it's not likely that anyone wants to assume the service-provider role for reasons we've outlined in the past. (See Qualcomm Open to Selling FLO TV Unit, TelcoTV's Smaller Screen, and CTIA Update: Day 1 at CTIA E&A.)
For that reason, Qualcomm's best bet may be to get out of the mobile TV biz entirely.
CFO William Keitel admitted it will incur restructuring charges of up to $175 million in fiscal 2011 to reduce ongoing expenses associated with the restructuring plan, and selling its valuable 700MHz spectrum may be the only way to recoup the hefty fees FLO TV's costing the company.
— Sarah Reedy, Senior Reporter, Light Reading Mobile