Bharti may buy 26 percent in Qualcomm venture, get a leg-up in BWA space -

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Bharti may buy 26 percent in Qualcomm venture, get a leg-up in BWA space

Thursday, 10 May 2012

Qualcomm Inc will rope in an operator as partner, who would initially pick up the 26 percent stake held by Tulip Telecom and GTL Group in its India broadband wireless access (BWA) venture. The two hold 13 percent each in the venture.

Talks with Bharti Airtel as the new partner, in their final stages, are expected to be completed soon as the US company received BWA spectrum in four circles yesterday after more than 18 months of delay and a bitter battle. If everything is on track, Qualcomm Inc expects it would be able to start services within six months.

Qualcomm has also decided it will not invest any more in the venture and is willing to see a slow dilution of its stake in the company in the next phase. Qualcomm has already forked out Rs 4,912 crore to win BWA spectrum in the circles of Delhi, Mumbai, Kerala and Haryana. It has also paid an additional Rs 410 crore to the Department of Telecommunications (DoT) as ordered by the TDSAT. The amount was the disputed dues its partners owed to the government.

However, with the DoT reducing the validity of its spectrum usage from 20 to 18.5 years, the valuation would come down proportionately for the company. Qualcomm was clear from the beginning it did not want to operate services but to assist operators to launch LTE 4G services, a technology it has backed against Wimax. The US company would make money from selling chipsets for devices, its core business.

The Qualcomm move is expected to speed up action in the BWA space, with Bharti Airtel taking the first strides. It has launched services in Kolkata and Bangalore already. A stake in Qualcomm would help Bharti Airtel spread its presence in the BWA space to eight circles, including the key cities of Delhi and Mumbai. –Business Standard

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