AT&T buys FLO TV for $1.9 billion

AT&T [NYSE:T] acquires the wireless spectrum underlying FLO TV from Qualcomm [NASDAQ: QCOM] for $1.92 billion. The spectrum is in the Lower 700 MHz frequency band and spans more than 300 million consumers across the U.S. AT&T has plans to deploy this new spectrum to supplement their 4G mobile broadband network rollout, leveraging the additional capacity for rich media content. The expectation is for AT&T to begin deployment in the second half of 2011 as compatible network equipment and devices hit the market.

Qualcomm reportedly dropped $683 million to acquire the FLO TV spectrum, which encompasses 12 MHz of D and E block spectrum covering 70 million plus people in Los Angeles, San Francisco, New York City, Philadelphia and Boston, along with 6 MHz of D block spectrum that covers 230 million plus people across the rest of the U.S. As reported, Qualcomm has invested a total of approximately $800 million (including spectrum, network and marketing) to launch FLO TV, but less than 1 million customers have signed up for the service.

FLO TV offers both simulcast and time-shifted content from NBC, CBS, ABC, Fox, MTV ESPN, CNN and others. Qualcomm first made public their plans to divest FLO TV in late July. Chairman and CEO Paul Jacobs said at the time the company was exploring “a number of alternatives” for the unit. Qualcomm will terminate their version of the FLO TV service March 27.