San Diego - Qualcomm is keeping all options open for the future of its FLO TV network, including a change in FLO TV's wholesale business model as well as a complete shutdown of service and sale of the network's 700MHz spectrum, chairman/CEO Paul Jacobs said during an analysts' conference call.
In early October, Qualcomm's FLO TV subsidiary
to shut down its consumer-direct service, likely in the spring, because of low adoption and the high cost of marketing, customer service, product development, and customer acquisition, a source close to the company explained. No decision, however, has yet been announced about the future of FLO TV's white-label service under which cellular carriers Verizon Wireless and AT&T buy the service on a wholesale basis for resale to consumers who buy select FLO TV-equipped handsets.
Qualcomm has already launched a restructuring plan "under which we expect to exit the current FLO TV service business," the company said in a statement. That plan will incur restructuring charges of $125 million to $175 million in fiscal 2011.
In continuing to evaluate FLO TV's future, Qualcomm said its options "include, but are not limited to, operating the FLO TV network under a new wholesale service; sale to, or joint venture with, a third party; and/or the sale of the spectrum licenses and the discontinuance of the operation of the network."
In its October announcement, FLO TV said it had "been engaging in conversations with a wide range of partners for both the network and the [700MHz] spectrum" and was "seeing strong interest in using the FLO TV network or spectrum to capitalize on the growing imbalance between mobile data supply and demand, the growth of tablets, consumer demand for high-quality video and print content, and a richer user experience."
During its conference call, Qualcomm did not reveal details of how it would compensate current FLO TV subscribers. In early October, it said only that it would "make appropriate refunds" that "will be communicated prior to discontinuation."
The factors that impeded FLO TV's consumer adoption aren't factors that would hamper the success of ATSC Mobile/Handheld (M/H) service,