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700 Mhz US Network for 3G Video Phones

2nd November , 2004

US : Qualcomm has established a subsidiary, MediaFLO USA Inc, to deploy and operate a nationwide network operating in the 700 MHz spectrum to deliver video and audio programming to third-generation mobile phones.

The San Diego, California based chip developer said the subsidiary is likely to need approximately $800 million in investments over the next 4 to 5 years, some of which may be funded by third parties. Qualcomm says the medium term aim is to spin off the subsidiary.

The MediaFlo network is expected to begin commercial operation in 2006. Negotiations have already started with US cellular operators to distribute the multimedia services in tandem with their networks.

There were no details of the likely cost of the service, except that they would be at 'mass market prices'.

Qualcomm said offering the network as a shared resource for CDMA2000 and WCDMA (UMTS) cellular operators would be the most efficient way to deliver mobile interactive multimedia to the operators' wireless subscribers.

"Qualcomm strongly believes that the broad delivery of wireless multimedia services is the logical next step in the evolution of the wireless industry," said Dr. Paul E. Jacobs, executive vice president and president of the company's Wireless and Internet Group.

"Building on our deep relationships with wireless operators, handset manufacturers and content providers, we can accelerate the adoption of multimedia on wireless devices by making it truly cost effective using our FLO technology and prime nationwide 700 MHz spectrum."

The company claims the technology can deliver multimedia content in an easy-to-use and familiar format at quality levels that dramatically surpass current distribution methods through the use of QVGA video at up to 30 frames per second and high-quality stereo audio. It can support 50-100 national and local content channels, including up to 15 live streaming channels and numerous clip-cast and audio channels.

Partnering cellular operators will be able to offer interactive and differentiated services in conjunction with their CDMA2000 1X, 1xEV-DO and WCDMA cellular networks without the cost of further deployment or need for new spectrum.

FLO (Forward Link Only) technology is designed to minimize the power consumption and size of mobile phones, and to integrate into the baseband chip.

Qualcomm holds licenses for the 700 MHz spectrum that will enable the network to serve all parts of the US. The majority of the spectrum was acquired in the June 2003 FCC auction, and the remainder last month from some other licensees.

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