Qualcomm to stop selling devices for mobile broadcast-video service that no one uses

Value of wireless spectrum powering FLO TV seals fate of subscription service

The Wall Street Journal reports Wednesday that wireless telecom player Qualcomm is halting the sale of $249 hardware used by subscribers of its FLO TV mobile broadcast-video service.

As the Journal explains, Qualcomm sees far more value in the real estate -- that is, the wireless spectrum that powers FLO TV -- than the actual service (which ends next spring). And rightly so.

Qualcomm reportedly has been shopping around FLO TV, but found no buyers. Not really a surprise. The fact that Qualcomm never shared subscriber numbers for FLO TV obviously was a bad sign. And the Journal reports that Qualcomm CEO Paul Jacobs was disappointed with subscriber levels.

But the spectrum...

Qualcomm bought the wireless spectrum powering FLO TV for $125 million, but estimated it ultimately spent $800 million on FLO TV. The spectrum could be sold for as much as $2 billion, according to an analyst quoted by the Journal. Even with the build-out and marketing costs that failed to pay off, that's a pretty good return on the investment. Prospective buyers would be wireless carriers such as Verizon Wireless, Sprint and AT&T.

In early afternoon trading Qualcomm (NASDAQ: QCOM) was down 7 cents to 44.19. But shares are up 40 percent since hitting a 52-week low of 31.63 on July 1, even though revenue declined in the company's fiscal third quarter from a year ago.

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