Code-division, multiple-access (CDMA) developer Qualcomm Inc. has announced its plan to acquire Flarion Technologies, a pioneer and developer of orthogonal frequency division multiplex access (OFDMA) technology and the inventor of FLASH-OFDM technology for mobile broadband Internet protocol (IP) services. Qualcomm will pay approximately $600 million, net of Flarion's projected cash at closing, in stock and cash. On the satisfaction of certain milestones over the next few years, the company may also pay an additional $205 million in the form of cash and stock. Completion of the acquisition, which is subject to regulatory approval and other customary closing conditions, is expected later this year.

According to market research firm ABI Research, this acquisition is a clear signal that Qualcomm, despite its faith in the future evolution of its CDMA technology, wants to stake out some territory in mobile wireless broadband. Though CDMA-based technologies such as EV-DO and UMTS/HSDPA have been touted as broadband wireless solutions, questions remain about their peak data rates, spectrum utilization, ability to handle IP and the triple play and their QoS capabilities. ABI added that at the same time there is industry consensus that OFDM with MIMO could be the technology of the future even for cellular.

But considering that WiMAX is more or less synonymous with broadband wireless, why didn't Qualcomm just buy a WiMAX IC or equipment company, rather than a company creating proprietary solutions? According to Alan Varghese, ABI Research's principal analyst of semiconductor research, the reasons could be twofold: "Just as they forged their own trail for cellular telephony with CDMA technology, Qualcomm may want to avoid the industry-standard path of WiMAX where competition will be high, control limited, and price erosion rapid, and instead build their own path."

He adds, "Even if productization of Flarion's technology slows down with the advent of WiMAX, Qualcomm can still realize revenue from royalties and licensing of Flarion's considerable IP in OFDM and all-IP traffic."

Based in Bedminster, N.J., Flarion Technologies is a spin-off from Lucent Technologies and has developed and deployed FLASH-OFDM mobile broadband since 2000. Flarion's product line consists of the RadioRouter base station, FLASH-OFDM modems, embedded chipsets, and system software to create an end-to-end network for mobile operators.

“With this acquisition, Qualcomm will be in a stronger position to support advanced development in both CDMA and OFDMA technologies,” said Paul E. Jacobs, CEO of Qualcomm. “We believe CDMA will provide the most advanced, spectrally efficient wide-area wireless networks for the foreseeable future, but with Flarion we can now more effectively support operators who prefer an OFDMA or hybrid OFDM/CDMA track for differentiating their services.”

“With the transition to third-generation (3G) CDMA wireless services well underway, CDMA2000 and WCDMA continue to experience substantial growth in markets around the world,” said Steve Altman, president of Qualcomm. Meanwhile, Qualcomm continues to focus on raising throughput and lowering cost of 3G CDMA networks with advances in receive diversity, interference cancellation, multicarrier and speech compression. The introduction of VoIP on data-optimized RF carriers and the integration of wireless LAN and multicast technologies, such as OFDM-based FLO (Forward Link Only) technology, provide increased opportunities for operators to deliver voice, data and wireless multimedia applications to their subscribers using various frequency bands and the air interface technologies best suited to the service offering, said Qualcomm.

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