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DoT Rejects Qualcomm’s ISP License Bid

Qualcomm has confirmed that India’s Department of Telecom has rejected its application for a license to offer Internet services, reports Reuters. The company, which had applied for a license to offer internet services with four partner companies namely Wireless Broadband Business Services (Delhi), Wireless Broadband Business Services, Wireless Broadband Services (Kerala) and Wireless Broadband Business Services (Haryana), after winning Broadband Wireless Access (BWA) auction, last year, has said that the grounds for rejecting its application were baseless, and that it had complied with the application process. It has said that it plans to continue to work with Indian authorities to resolve the matter.

The announcement comes soon after reports, including one by DNA which indicated that the DoT had rejected Qualcomm’s bid and had sent a letter to the company earlier this month, informing the same. Note that Qualcomm in its response to DNA had denied receiving a letter from the Department. According to the letter, the reasons cited for the rejection of Qualcomm’s application include:

– Expiry of deadline for bids: Qualcomm’s application came after the deadline inviting bids expired, in December, around three months after the letter of intent was issued to it. According to Qualcomm its locally incorporated partner companies had sent bids in August, however, the DoT asked for a clarification from Qualcomm in November, after the 90 day window period expired, to which Qualcomm replied in December.

– Nominating four companies instead of one: The other reason mentioned in the letter was that Qualcomm had nominated four different ISP companies instead of one, for getting a Category A ISP license, which does not comly with the rules mentioned by the NIA in the letter of intent.

Qualcomm had won 4G spectrum in Delhi and Mumbai, along with Kerala and Haryana, for the cost of Rs. 4912.54 crore for spectrum in four circles. Mumbai was its most expensive acquisition at Rs. 2292.95 crore. Qualcomm had brought in two Indian companies – Tulip Telecom and Global Holdings – into the venture, since it needed an Indian partner: foreign entites are allowed to own a maximum of 26% in telecom ventures in India. Earlier this year, India’s Foreign Investment Promotion Board (FIPB) had given the approval for Qualcomm to invest up to Rs. 796.9 Crore in the internet business. It was expected to launch 4G services on LTE infrastructure by the end of this year, although it is expected to exit the business at a later stage.

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