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Airtel Buys 49% In Qualcomm’s Indian 4G Biz; Gets Delhi, Mumbai, Haryana, Kerala

Bharti Airtel has signed an agreement with Qualcomm, under which, Bharti has made an initial investment of approximately $165 million (Rs 927.39 crore approx) to acquire 49% interest in Qualcomm’s India entities that hold BWA/4G licenses in Delhi, Mumbai, Haryana and Kerala. The deal is partly by way of acquisition of 26% equity interest, equally held by Global Holding Corporation Private Limited and Tulip Telecom Limited, and the balance by way of subscription of fresh equity in Qualcomm’s entities. The agreement contemplates that after the launch of the commercial operations, subject to certain terms and conditions, Bharti would assume complete ownership and financial responsibility for the BWA entities by the end of 2014.

The move does not come as a surprise because Qualcomm, which is more focused on being a technology provider, always intended to exit the business after setting it up. There was speculation that Bharti would be buying the spectrum since it was crucial for it to enter critical markets like Delhi and Mumbai, where it had not been able to secure spectrum during the auctions, but regulatory hurdles prevented such a deal till Qualcomm was allotted spectrum, last week.

Bharti has BWA licenses in four circles – Kolkata, Karnataka, Punjab and Maharashtra, and has already launched 4G services in Kolkata and Karnataka Circles. Qualcomm expects to provide technical assistance to Bharti in connection with network architecture and optimization, infrastructure and device testing, as well as intends to develop and support the underlying technology and the LTE TDD ecosystem.

Qualcomm’s 4G License Woes In India

Qualcomm had won BWA spectrum in four circles including Delhi, Mumbai, Kerala and Haryana for Rs 4912.54 crore. It brought in India-based Tulip Telecom and Global Holdings as its LTE rollout partners for $28 million since foreign companies were allowed to own a maximum of 26% in telecom ventures in India. Qualcomm applied for an ISP 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).

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However, it had hit a roadblock when DoT rejected its application saying that its bid came in late, and that Qualcomm had nominated four different ISP companies instead of one, in order to get a Category-A ISP license, which did not comply with the NIA rules mentioned in the letter of intent. After a legal battle, the TDSAT ruled in favour of Qualcomm, and DoT  issued an Internet Service Provider (ISP) license to the company in March. Qualcomm was allotted 4G spectrum, last week, however,  unlike other companies which have the right to use this BWA spectrum for the next 20 years, Qualcomm will be allowed to make use of this spectrum only for the next 18.5 years due to a prior 18 month delay on the company’s part.

Qualcomm Finally Gets BWA Spectrum; Timeline
Qualcomm Finally Gets An ISP License
Qualcomm Makes Management Changes; Gets Stay On India 4G License Cancellation
DoT Rejects Qualcomm’s ISP License Bid
Qualcomm Brings Tulip, GHC As India LTE Rollout Partners For $28M; Telco Deals In Phase 2

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