Bharti Said to Near Purchase of Qualcomm’s Indian Mobile License
Qualcomm Inc. (QCOM) is asking Bharti Airtel Ltd. (BHARTI), India’s largest mobile-phone operator, to pay about 50 billion rupees ($928 million) for its Indian unit as the two companies seek to conclude talks in the next two weeks, according to two people with knowledge of the matter.
Bharti may purchase the unit in installments over two years, the people said, declining to be identified as the details are private. Under the plan, Bharti would initially purchase a 26 percent stake in the unit, currently held by Tulip Telecom Ltd. (TTSL) and Global Holding Corp., and Qualcomm will own 51 percent of the division for at least two years after that, the people said.
Qualcomm, the biggest maker of mobile-phone chips, bought frequency licenses in cities including New Delhi and Mumbai in June 2010, paying 49.1 billion rupees for spectrum that allows handset users to download video at greater speeds. The San Diego, California-based company was allocated spectrum this month, two years after paying for the airwaves, people with knowledge of the matter said on May 8.
Mobile-phone operators in India including Bharti Airtel and Vodafone (VOD) Group Plc are trying to boost revenue by selling services such as video streaming as incomes rise. The number of smartphones sold in India almost doubled last year to 11 million, according to data compiled by Bloomberg.
Tulip Telecom and Global Holding paid 1.4 billion rupees each for their 13 percent stakes in Qualcomm’s Indian unit in 2010. Qualcomm owns the remaining 74 percent.
Dimple Kapur, a spokeswoman for Qualcomm in Mumbai, didn’t immediately respond to an e-mail or phone call seeking comment on the sale. Spokesmen for Bharti Airtel and Global Holding declined to comment. The Economic Times reported last month that Bharti was in talks to buy Qualcomm’s new licenses, without naming its sources.
“Qualcomm as the major partner will take all decisions with respect to bringing in any operator partners,” Tulip Telecom Chairman Hardeep Singh Bedi said in a phone interview, without elaborating.
India penalized Qualcomm for delays in providing fourth-generation mobile services using the long-term evolution, or LTE, technology, by cutting the length of its licenses by 18 months, the people familiar with the matter said on May 8. Qualcomm Chief Executive Officer Paul Jacobs said in a letter to Telecom Minister Kapil Sibal dated April 16 that there was “no basis” for the penalty which Qualcomm estimated would cost it $90 million.
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