Crown Castle International, the Tower operator is dumping its multimedia mobile TV service called Modeo that is based on the DVB-H standard that it tested successfully in New York City earlier this year. Crown Castle is now going to lease the U.S. nationwide 1670-1675 MHz spectrum it used for Modeo to Telcom Ventures, LLC and Columbia Capital, LLC, two private equity firms, for $13 million a year and write off Modeo’s physical assets, which includes an operations center in Pittsburgh and various small transmitters in the New York area. Crown Castel will retain the spectrum itself. Modeo never got off the trial stage and must have been in trouble for a long time because the trials started a long time ago.
The company will “write-off all, or substantially all, of its Modeo assets, other than its Spectrum, in the third quarter 2007.” The lease is from July 23, 2007, until Oct. 1, 2013. When the lease ends, the PE firms have the option to acquire the spectrum for $130 million or renew the lease for up to 10 years at $14.3 million per year.
Interestingly, this means that Qualcomm is the last-man-standing in Mobile TV that is transmitted outside the cellular spectrum. This is testament to Qualcomm’s lobbying and marketing capability – Qualcomm already has agreements with Verizon Wireless and AT&T to launch mobile TV using Qualcomm’s MediaFLO technology in the 700 MHz spectrum that Qualcomm owns. Verizon Wireless has already launched mobile TV. Sprint uses an Mobi TV, which transmits mobile TV within the cellular spectrum (in-band). Back in 2004, I remember thinking how smart Qualcomm was in acquiring national spectrum where it effectively becomes the service provider. Qualcomm may be a tad arrogant, and over-confident in their abilities, but these guys develop good strategies and execute very well.