Qualcomm Inc. (QCOM) could be one of the big losers if lawmakers succeed in delaying the move to digital television signals from analog transmissions.

TV stations are slated to vacate analog airwaves on Feb. 17, freeing up the spectrum for wireless carriers and for Qualcomm, which plans to expand its mobile broadcast TV offering, known as MediaFLO. But Congress wants to postpone the transition, a move supported by President Barack Obama. Rep. Henry Waxman, D-Calif., and Sen. John Rockefeller, D-W.Va., proposed a new date of June 12.

A delay would be costly to Qualcomm, which has invested hundreds of millions of dollars in equipment and wireless licenses. MediaFLO, while available on Verizon Wireless and AT&T Inc.'s (T) services, has struggled to add customers. The limited availability is one reason Qualcomm believes the service has received little marketing support from the carriers and, thus, sparse interest from consumers.

"We are very much opposed to the delay of the DTV transition," Qualcomm Chief Operating Officer Len Lauer told Dow Jones Newswires on Thursday. "The delay will cost us tens of millions of dollars in extra expense and lost revenue."

Company observers believe Qualcomm may be feeling the pressure to expand the service to gain a better foothold. It's still unclear whether demand exists for the service.

"I can understand Qualcomm's concern," said Robert Prudhomme, who works for telecom consultancy inCode. "It's getting pretty crowded in a low-adoption space."

Chief Executive Paul Jacobs wrote a letter to Congress, pleading to maintain the digital transition schedule.

Such wireless service providers as AT&T also have a stake in the speedy transition to digital signals, because they intend to use the old airwaves to broadcast their next-generation wireless networks. But their need is less pressing, since those deployments won't occur for years.

Likewise, such smaller players as MetroPCS Communications Inc. (PCS) and Leap Wireless Inc. (LEAP) don't intend to use the spectrum immediately. Qualcomm is one of the few companies that is ready to switch on its service right away. It plans to launch MediaFLO in four markets on Feb. 18.

 
   Pricey Delay

Qualcomm has poured money into MediaFLO equipment under the assumption that the nationwide network could be flipped on next month. That money is in addition to the $550 million spent on the spectrum in the last Federal Communications Commission auction. A delay will result in added expense and lost revenue, Lauer said.

The biggest expense comes from fees Qualcomm is paying to broadcasters to vacate the analog signals early, allowing them to operate in those regions. The fees were supposed to stop once the transition occurs, but if it gets pushed back to June, Qualcomm has to keep paying them out. It's the biggest expense, which Lauer described as "tens of millions of dollars."

Another wrinkle may come from a pushback in orders for wireless equipment and chips by carriers if the transition date is postponed by several months.

"They have a big market for chipsets and infrastructure devices, so it affects them in multiple ways," Prodhomme said.

Lauer, however, said he doesn't believe the impact from delayed equipment sales will be significant.

Qualcomm is also looking to the lost revenue from potential new markets. Boston, Houston, Miami and San Francisco are the most high-profile cities that can't get MediaFLO. The expanded coverage will reach 40 million people, Jacobs said.

Only when those major cities are covered will AT&T and Verizon Wireless - jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD) - start rolling out nationwide advertising campaigns, Lauer said. Most people still aren't aware of the service.

"Education of the service is one of our biggest challenges," he said.

 
   Low Adoption

It's unclear whether the added attention will guarantee more customers for Qualcomm.

Mobile video has been a disappointing service. Qualcomm doesn't break out numbers for MediaFLO, but inCode estimates that 6.5 million subscribers watched mobile video last year, or about half what analysts expected. Of that total, only a fraction watched live TV on their cellphones.

"The business model doesn't work," said Edward Snyder, an analyst at Charter Equity Research. "Basically, the product they're delivering turns out to not have much value to the end user."

While the service may have a niche following, it won't be popular enough to move the needle on Qualcomm's broader results, Snyder said.

Competition in the area is heating up. AT&T tapped privately held RaySat Broadcasting Corp. to deliver TV to cars, something Qualcomm wants for MediaFLO. DISH Networks Corp. (DISH) and ICO Global Communications Holdings Ltd. (ICOG) are testing out their own mobile TV services.

Qualcomm remains hopeful. Lauer said he expects subscriber growth to ramp up "significantly" once carriers begin aggressively marketing the service.

In Thursday trading, Qualcomm shares were recently up 1.25% to $36.32.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

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