Qualcomm (Nasdaq: QCOM) unveiled details of its FLO TV device rebate program as it prepares to wind down the ill-fated mobile broadcast initiative in early 2011. Qualcomm will terminate FLO TV services on March 27. The firm said consumers who've purchased a FLO TV Personal Television, Audiovox Portable DVD Player with FLO TV or FLO TV Auto Entertainment unit and activated a corresponding service account may qualify for a rebate. To collect, users must submit an online rebate form for each device, not the device itself -- according to Qualcomm, rebate totals are determined by the retail price of the device on the date of activation, and in cases where the device was never activated, proof of purchase is required. Upon contacting FLO TV Customer Care, service will be disconnected within 72 hours; service will be pro-rated, with any charges from unused service refunded to the consumer's credit card account. Rebates will be issued via check and arrive between four and six weeks after the claim is validated.
FLO TV features simulcast and time-shifted broadcast content from partners including ABC, CBS, NBC, Fox, ESPN, MTV and CNN. Initially available only in limited markets, FLO TV went nationwide in mid-2009 in conjunction with U.S. broadcasters' long-planned transition from analog to digital, which freed up the necessary spectrum. Qualcomm reportedly spent $683 million acquiring the spectrum to run FLO TV, stating it would invest about $800 million in total (including spectrum, network build-out and marketing costs) to launch the network, but fewer than 1 million customers signed up for the service. Qualcomm expects its exit from the FLO business to incur charges between $125 million and $175 million in fiscal 2011.
Qualcomm first acknowledged 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, including discussions with prospective partners. Last month, Bloomberg reported Qualcomm entered talks with AT&T (NYSE: T) over the potential sale of the FLO TV wireless spectrum; the present status of the negotiations is unknown. Gleacher & Co. analyst Mark McKechnie forecasts the FLO spectrum could fetch as much as $1 billion on the open market: "It's got to be worth more now; they got that spectrum before the Apple (Nasdaq: AAPL) iPhone came out," McKechnie told Bloomberg.
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