The Competition Commission (CCI) has approved the merger of four broadband wireless business entities jointly owned by Qualcomm and Bharti Airtel, reports Business Standard. Qualcomm owns 51% stake in each of these four companies while the remaining 49% equity is owned by Bharti Airtel.

Qualcomm’s four BWA (Broadband Wireless Access) entities in Delhi (WBBS Delhi), Kerala (WBBS Kerala) and Haryana (WBBS Haryana) would be merged with Wireless Business Services Pvt Ltd (WBSPL). The Wireless Business Services Pvt Ltd. was allotted licenses for BWA (high-speed internet) services in these three states and in Mumbai. The report states that the shareholding pattern of each of WBSPL, WBBS Delhi, WBBS Haryana and WBBS Kerala before the merger and the shareholding pattern of WBSPL after the merger would remain the same. Hence, it will not give rise to any adverse competition concern, however, acccording to the CCI, the order would be revoked, if at any time, the information provided to it is found to be incorrect.

Time-line of events:

– In June 2010, Qualcomm had won BWA spectrum in four circles including Delhi, Mumbai, Kerala and Haryana for Rs. 4912.54 crore, with Mumbai being the costliest circle for the company at Rs 2292.95 crore.

– In January 2011, India’s Foreign Investment Promotion Board (FIPB) had given the approval for Qualcomm to invest in its Indian Broadband Wireless Access venture.

– In March 2012, the Department of Telecommunications (DoT)  issued an Internet Service Provider (ISP) license to Qualcomm, enabling the company to roll out BWA services (4G) in the country. However, the company did not launch its operations when the Department of Telecommunications (DoT) allotted BWA spectrum to Qualcomm enabling the company to offer wireless broadband services in the country.

– Instead, in May 2012, Bharti Airtel signed an agreement with Qualcomm, under which, Bharti 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 was made 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.

4G service in India

According to reports, Tikona Digital Networks will be investing $200 million or Rs 1,100 crore to buy 4G network gear. It  had floated a request for proposals (RFP), inviting bids for 4G equipment, as per the report. Tikona is expected to launch its 4G in Gujarat and Rajasthan  by beginning of next year. Tikona holds 4G licences in five circles including Gujarat, Rajasthan, Uttar Pradesh-East, Uttar Pradesh-West and Himachal Pradesh.

RIL hasn’t revealed its 4G service rollout strategy yet, and it’s been almost close to two years that the company acquired pan-India BWA spectrum through the acquisition of Infotel Broadband, which had won BWA spectrum in all 22 circles in the country for Rs 12,847.77 crore during the 2010 BWA auctions.

Bharti Airtel had BWA licenses in four circles – Kolkata, Karnataka, Punjab and Maharashtra, and has already launched 4G services in Kolkata and Karnataka circles. Neither BSNL not MTNL has launched its 4G service yet. BSNL has been reporting losses for the last three years. The operator was also looking to surrender its BWA spectrum and had received the Department of Telecommunications (DoT)’s nod in December 2011. BSNL had paid Rs 8,313.80 crore to acquire spectrum in 17 circles. Although DoT has accepted BSNL’s request, the company will receive a refund only when the spectrum is put on auction.