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Qualcomm May Sell 26% Stake In BWA Ops To Tulip; Enterprise?

While Tulip Telecom has clarified to the Bombay Stock Exchange that there is no formal agreement with Qualcomm to pick up 26% stake in the latters Broadband Wireless Access business, it hasn’t denied any such discussions or plans. The clarification came following a PTI story that suggested that Qualcomm, which needs to close a partnership with an Indian entity in order to roll out LTE wireless broadband services in India, has finalized an agreement with Tulip. A Tulip Telecom spokesperson declined to comment on the news when contacted by MediaNama. As per Indian foreign direct investment (FDI) norms, only 74% stake can be held in an Indian telecom operator by way of foreign direct investment.

Qualcomm had won BWA (Broadband Wireless Access) unpaired spectrum in the 2.3 GHz band in four telecom circles in India: 20 MHz each in Delhi, Mumbai, Haryana and Kerala for a total of Rs. 4912.54 Crore or approximately $1.045 Billion. More details on the auction winners here. It bid for the spectrum with the objective of rolling out LTE infrastructure for deploying its 3G/LTE multi-mode chipsets, complementing 3G HSPA and EVDO networks; EVDO services are already operational in India.

While nothing has as yet been confirmed, the choice of Tulip is an interesting one: Tulip is primarily an enterprise connectivity solutions provider with a Category A ISP license; it uses wireless spectrum for backhaul, and has a nationwide service framework to offer last mile connectivity over leased line, fiber and wireless. This deal, if it does go through, will probably result in an entry into the consumer space, which is what Qualcomm would ideally like showcase as an LTE rollout. Also remember that Qualcomm intends not to run the services as a telecom operator, but eventually exit the venture.

For the financial year ended 31s March 2010, Tulip Telecom reported revenue of Rs. 1966.4 crore, up 21.8% from Rs. 1614.4 crore the previous year, and a profit of Rs. 275.5 crore, up 9.96% over the previous year. 26% of Qualcomm’s Rs. 4912.54 crore payment to the Indian government for BWA spectrum amounts to Rs. 1277.26 crore.

Related:
India’s Broadband Wireless Auction Ends; Operator & Circlewise Results
Qualcomm To Bid For India’s Wireless Broadband Spectrum In Upcoming Auction
Updated: Reliance Industries Buys 95% In BWA Auction Winner Infotel; To Invest Rs. 4800 Cr
India’s 3G Auction Ends; Operator And Circle-Wise Results

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MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ