Qualcomm said it has signed an agreement to sell a 49% stake in its Indian operation that holds spectrum licenses covering Delhi, Mumbai, Haryana and Kerala to Bharti Airtel for $165 million, and that the Indian company is on its way to controlling the entire entity by the end of 2014.
The deal calls for Bharti to acquire a 26% equity interest currently held by Global Holdings and Tulip Telcom in Qualcomm Asia Pacific’s Indian operation, with the remaining interest coming from a purchase of new equity in those companies. Bharti would then assume complete ownership of and financial responsibility for the Qualcomm operations once commercial operations are launched.
Qualcomm noted that it will provide “technical assistance” to Bharti in deploying the TDD-LTE-based network. Bharti currently controls BWA licenses covering Kolkata, Karnataka, Punjab and Maharashtra circles, and has deployed TDD-LTE services in Kolkata and Karnataka. The carrier also has 3G licenses covering 13 circles across India.
Qualcomm originally picked up the BWA licenses during a government auction in 2010, spending $1 billion for the four licenses. The Indian government requires that foreign owners of spectrum licenses needed to partner with local companies in order to meet the country’s Foreign Direct Investment regulations. Analysts noted that Qualcomm went into the auction with the intent of securing licenses to ensure it would have a place at the table for carriers looking to evolve their networks from 3G to 4G and not with an intent of becoming a wireless carrier.
“One of our key objectives has been to include a strong partner in the Indian venture with the scale, experience and resources to deploy LTE TDD networks,” explained Paul Jacobs, chairman and CEO of Qualcomm, in a statement. “We are pleased to have Bharti’s participation and support in this effort. GHC and Tulip have been great partners in facilitating this transaction. Qualcomm remains dedicated to the continued progress and success of the BWA venture and to fulfilling our commitment as a key equity stakeholder.”
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