Qualcomm Announces Agreement for Sale of 700 MHz Spectrum Licenses
SAN DIEGO, Dec. 20, 2010 /PRNewswire-FirstCall/ — Qualcomm Incorporated (Nasdaq: QCOM) today announced that it has agreed to sell its Lower 700 MHz D and E Block (Channel 55 and 56) unpaired U.S. spectrum licenses to AT&T for $1.925 billion. The sale follows Qualcomm’s previously announced plan to restructure and evaluate strategic options related to the FLO TV business operated by FLO TV Incorporated, a wholly owned subsidiary of Qualcomm. It is expected that the FLO TV business and network will be shut down in March 2011.
AT&T announced today that as part of its longer-term 4G network plan, it intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology. This technology is designed to deliver substantial capacity gains by enabling unpaired spectrum to be used in conjunction with paired spectrum.
Qualcomm is integrating carrier aggregation technology into its chipset roadmap to enable supplemental downlink and intends to market the technology globally. This new technology is expected to create opportunities around the world in markets where unpaired spectrum bands can be made available for wireless operators to use in conjunction with existing paired bands to obtain substantial improvements in their mobile broadband networks.
Qualcomm plans to take advantage of its experience in broadcast technology to develop LTE multicast technologies that address the rapidly growing demand for high-bandwidth video and other multimedia content.
“This is a positive outcome for Qualcomm and our stakeholders,” said Paul Jacobs, chairman and CEO of Qualcomm. “Carrier aggregation, supplemental downlink and LTE multicast technologies are an exciting evolution of next generation wireless systems to economically support increasing consumer demand for mobile TV and other rich media content. We will continue to drive the development and delivery of these new capabilities, which build on our technology leadership and deep experience with 3G, 4G and broadcast technologies.”
Completion of the spectrum transaction is subject to the satisfaction of customary closing conditions, including approval by the U.S. Federal Communications Commission and clearance from the U.S. Department of Justice. Qualcomm and AT&T anticipate closing the sale during the second half of calendar 2011. The proceeds will be received at closing.
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, primarily related to certain contractual obligations, with the potential for additional charges depending on the outcome of the evaluation of strategic options for the business. As a result of this agreement to sell the spectrum licenses, it is anticipated that additional charges will be incurred related to the shut down of the FLO TV network and associated business exit costs.
Qualcomm Incorporated (NASDAQ: QCOM) is the world leader in next-generation mobile technologies. For 25 years, Qualcomm ideas and inventions have driven the evolution of wireless communications, connecting people more closely to information, entertainment and each other. Today, Qualcomm technologies are powering the convergence of mobile communications and consumer electronics, making wireless devices and services more personal, affordable and accessible to people everywhere. For more information, visit Qualcomm around the Web:
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Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of the Company could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected benefits and costs of the transaction and the estimated net cash proceeds of the transaction; management plans relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction considering the various closing conditions, including any conditions related to regulatory approvals; any statements of the plans, strategies and objectives of management for future operations, including the development of supplemental downlink technology, the integration of supplemental downlink technology into the Company’s chipsets, the development of carrier aggregation and LTE multicast technologies and the availability and deployment of carrier aggregation and LTE multicast technologies; any statements of expectation or belief, including the benefits of carrier aggregation, supplemental downlink and LTE multicast technologies; the expected timing for the shut down of the FLO TV business and the amount of any additional charges related to the wind down of the FLO TV business; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits may not materialize as expected; that the transaction may not be timely completed, if at all; that carrier aggregation and supplemental downlink technology can be successfully developed and adequate quantities of chipsets implementing such technology will be available on satisfactory terms and in a timely manner; that carrier aggregation and LTE multicast technologies can be timely developed and deployed; that the additional charges associated with the wind down of the FLO TV business are greater or less than anticipated; as well as the other risks detailed from time to time in the Company’s SEC reports, including the report on Form 10-K for the year ended September 26, 2010, and most recent Form 10-Q. The Company undertakes no obligation to update, or continue to provide information with respect to, any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.
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SOURCE Qualcomm Incorporated