Qualcomm yesterday announced plans to acquire Flarion Technologies, a leading developer of Orthogonal Frequency Division Multiplex Access (OFDMA) technology and inventor of FLASH-OFDM.

Under the deal, which is expected to close later this year, Qualcomm will pay $600 million in stock and cash for Flarion, but that amount could increase by an additional $205 million if certain milestones are reached during the next few years.

Flarion conducted a promising trial with Nextel Communications, but the carrier decided against adopting FLASH-OFDM when it merged with Sprint. Although Flarion recently announced a win with the government of Finland, its lack significant commercial customers meant that it made sense to sell the company, Precursor wireless strategist Rudy Baca said.

“They had to do something to stay alive,” Baca said.

Qualcomm was a logical buyer, because it has prospered through licensing its CDMA technology and has the infrastructure to extend that model to OFDMA during the latter part of the decade, Baca said.

“I think it’s a hedge against 4G,” Baca said, noting that FLASH-OFDM is a more mature mobile broadband technology than any of the mobile WiMAX offerings. “I really think this is about increasing the patent portfolio for Qualcomm.”

Indeed, Qualcomm President Steve Altman expressed the importance of these factors in a prepared statement regarding the purchase of Flarion.

“With the transition to third-generation CDMA wireless services well underway, CDMA2000 and WCDMA continue to experience substantial growth in markets around the world,” Altman said. “The acquisition of Flarion establishes QUALCOMM as a preeminent developer of emerging OFDMA technologies, enhances our internal OFDMA developments and, when combined with our existing portfolio, results in our owning an industry-leading OFDMA intellectual property portfolio.”