AT&T buys Flo TV spectrum for more 4G 'downlink' capacity

AT&T today said it has agreed to purchase wireless spectrum from Qualcomm for $1.925 billion and use it to enhance its 4G service offerings.

The spectrum is currently used to support Qualcomm’s Flo TV wireless video broadcast service, which the company was rumored back in October to be shutting down , and which will now officially be shuttered next March.

AT&T can certainly use all the spectrum it can get, with demand for 4G and mobile broadband services soaring.

AT&T said the spectrum it purchased operates in the lower 700MHz frequency band – 12 MHz of 700 MHz D and E block spectrum covering 70 million subscribers in New York, Boston, Philadelphia, Los Angeles and San Francisco, plus 6 MHz of D block spectrum covering 230 million subs across the U.S.

The question is, of what use exactly will that spectrum be to AT&T? Connected Planet Wireless Editor Kevin Fitchard provided a detailed analysis back in November about the limitations of the Flo TV spectrum for AT&T, in particular its lack of an uplink band required for a full LTE service deployment.

Seemingly addressing such concerns, AT&T said it plans to deploy the Flo TV spectrum as “supplemental downlink” capacity, using carrier aggregation technology as defined in 3GPP Release 10 to make the spectrum more suitable to its needs. Handsets and network equipment supporting this approach are not yet available, so the spectrum won’t immediately impact AT&T’s network.

In particular, it would give AT&T extra capacity in areas of heavy mobile broadband use – necessary as smartphones and tablets drive larger mobile data downloads, such as via video streaming.

Mobile operators are getting increasingly creative in how they deploy spectrum, combine 3G and 4G (and in the case even 2G in the case of M2M) technologies and take advantage of mobile offload technologies like Wi-Fi and femtocells to stretch their resources and deliver next-generation mobile services to subscribers, regardless of the underlying network technology.

Interestingly, Qualcomm in a separate announcement today said it plans to integrate the carrier aggregation technology AT&T needs into its chipset road-map, potentially cashing in twice on this deal – once today on the spectrum sale and perhaps again in the future via chip and equipment sales.

Flo TV turned out to be a major boondoggle for Qualcomm – an interesting idea that was trumped in the market by raw operator bandwidth coupled with over-the-top video services delivered to mobile devices. In its latest quarter, according to an AP story, the operating costs of running Flo TV totaled $132 million for Qualcomm.

The AT&T deal may make up for its costs and losses, however. Qualcomm paid $558 million for the “big-city” chunk of spectrum and just $38 million for the nationwide slice, the AP reported.