Qualcomm Names India LTE Investors

Following weeks of speculation, Qualcomm Inc. (Nasdaq: QCOM) today announced Global Holding Corp. and Tulip Telecom Ltd. as the initial investor partners in its broadband wireless access (BWA) venture in India.

Under the agreements announced today, Global Holdings, the parent company of independent wireless tower company GTL Infrastructure Ltd. , and Tulip Telecom, an enterprise data services specialist (VPNs, integration services), are paying $28.9 million apiece for 13 percent stakes in the BWA venture. (See Reliance, GTL Strike $10.8B Tower Deal and Reliance, GTL Merge Tower Units.)

Qualcomm recently acquired BWA spectrum in India, winning licenses in four service circles -- New Delhi, Mumbai, Kerala, and Haryana. (See Qualcomm Wins India Spectrum and Analysts: Bidding for BWA to Be as Fierce as 3G.)

It plans to build a network based on TD-Long Term Evolution (LTE) technology, but, under Indian law, needs local partners to be able to apply for the license required to build and operate the networks it is planning in the four areas where it won 2.3GHz spectrum.

Tulip Telecom, it is worth noting, is not contributing its data network assets into the joint venture, but regards its "strategic partner" relationship as an investment.

Qualcomm retains a 74 percent stake in the joint venture that, given the cost of the stakes sold to Global Holdings and Tulip Telecom, is currently valued at $222 million.

"As expected, these initial partners are operator-neutral, but bring strong telecom and broadband industry experience in India. However, it is surprising that the initial capitalization for the India-registered venture is only $222 million," says Heavy Reading senior consultant Berge Ayvazian.

Now that Qualcomm has the local partners it needed, it can apply for an ISP license. Once it has that license, it will look to broker a further partner relationship (or relationships) with one or more wireless operators that can help Qualcomm develop its venture further.

"We are in talks with all the operators having 3G HSPA and EV-DO networks, which protects and enhances the investment made by the Indian operators in securing 3G and BWA spectrum," stated Kanwalinder Singh, president of Qualcomm India and South Asia, at a press conference today.

Qualcomm is aiming for its venture to launch services some time in 2011. The vendor intends to exit the venture once it starts offering services. (See Qualcomm Unveils LTE Plans for India.)

But to reach that point it's going to need further investment partners, reckons Heavy Reading's Ayvazian.

"Today's development suggest that additional investors will still be needed for Qualcomm to raise the capital needed to construct and operate the new wireless broadband networks," he says. "But the market is still waiting for Qualcomm to present a detailed plan to deploy TD-LTE technology and reveal operator partnerships as a part of its go-to-market strategy."

— Gagandeep Kaur, India Editor, Light Reading

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