Qualcomm on Friday said it acquired spectrum licenses in a United Kingdom auction, allowing the wireless chip maker to establish a European foothold for MediaFLO, its mobile TV broadcast technology.
San Diego-based Qualcomm paid $16.3 million for the spectrum covering the entire U.K.
Qualcomm has permission to use the spectrum for any legitimate service ranging from mobile TV to satellite radio.
But the company is almost certain to use the spectrum as a showcase for MediaFLO, since the European Union in March officially endorsed DVB-H, a competing technology developed in Europe by Nokia.
"This is a both a bargain and an opportunity for Qualcomm particularly since they did not pay that much for the spectrum compared to what they recently paid for spectrum in the U.S.," said Tim Farrar, president of Telecom Media and Finance Associates.
In March, Qualcomm paid $558 million for 700 MHz spectrum that did not cover the entire U.S. The company added that latest spectrum haul to its already expensive U.S. MediaFLO 700 MHz spectrum stockpile it acquired in 2003 and 2004.
To date there is only one commercial mobile TV network built on Qualcomm's MediaFLO technology and that was released in the United States by Qualcomm. Both Verizon Wireless and AT&T use the network to broadcast TV programs to their subscribers. (see AT&T, Qualcomm Test Mobile TV Reception)
On the other hand there is a long list of countries where mobile TV services based on DVB-H are either being offered commercially or being tested. Italy, India, Finland, Singapore, Philippines, Ireland, Viet Nam, Malaysia, Kenya, Iran, France, South Africa, and even the U.S. are on that list.
Despite its poor early prospects, Qualcomm will use its spectrum to showcase what it considers MediaFLO's technical and cost advantages over DVB-H in a venue outside the U.S.
If Qualcomm can build a MediaFLO network in the less attractive L-Band and help drive down handset prices, it may get many more carriers and countries on its side, said Mr. Farrar.
Carriers will prefer to use the more attractive UHF and VHF bands, the two other bands designated for mobile TV, for more mature and profitable two-way communications services rather than mobile TV which has so far been disappointing.
The UHF and VHF bands are being freed up by Europe's transition to digital TV and it is unclear whether that spectrum will be controlled by cellular carriers or broadcasters.
"This is far from a done deal for DVB-H," Mr. Farrar said. "Even if DVB-H dominates, MediaFLO can grab say 20 percent of the market and if the market turns out to be very large, MediaFLO can be quite successful."