The chipmaker may divest 13 per cent each to Global Holding and Tulip Telecom
Qualcomm, the US-based chipmaker, plans to divest over 50 per cent stake in its broadband wireless venture. “Initially, we will divest 26 per cent stake and in the second phase, we will look at diluting another 26 per cent with a local or a foreign partner. The first deal is likely to be finalised within a month,” Qualcomm India and South Asia President Kanwalinder Singh said.
Meanwhile, investment bankers, privy to these negotiations, said the chipmaker would initially divest 13 per cent to Global Holding Corporation, the holding company of GTL Infrastructure, and another 13 per cent to Tulip Telecom.
While Tulip officials could not be reached, GTL Infra’s Chairman Manoj Tirodkar said, “As a policy, we don’t comment on speculation.”
Singh also refused to divulge any further detail and said the company was looking for partners who won third generation (3G) spectrum. “Qualcomm’s goal is to attract one or more experienced 3G HSPA (high speed packet access) and/or EV-DO operator partners into the venture.”
Qualcomm won broadband wireless access (BWA) spectrum in four circles, including Delhi and Mumbai. The company, which also bagged the Haryana and Kerala circles, would pay Rs 4,912.54 crore by June 22 for BWA spectrum.
Both Global Holding and Tulip will infuse Rs 150 crore each as equity. Qualcomm will bring in another Rs 900 crore as its equity contribution. The chipmaker will raise a debt of Rs 3,700 crore and for this, it is in talks with Bank of America-Merrill Lynch, along with Axis Bank and the State Bank of India (SBI), according to the sources. The money would be raised against Qualcomm’s global balance sheet.
More From This Section
Tulip Telecom was chosen because of its value added information technology (IT) applications, neutrality, relationship with existing telecom companies and last mile internet connectivity. Global Holding is likely to bring in active infrastructure sharing platform via group company Global Rural NetCo.
Though foreign players, according to foreign direct investment (FDI) norms, can invest up to 74 per cent in telecom, they were allowed to bid in the spectrum auction without any Indian partner. But after winning the bids, foreign players need to follow the government policy on FDI.
Qualcomm, which is promoting the Long Term Evolution (LTE) technology, said the company would conduct a LTE demonstration in India by the end of this year.
LTE is best suited to address the demand for high-bandwidth mobile broadband services in India and can seamlessly interwork with current and future 3G HSPA and EV-DO networks. The company would continue to play a central role in the LTE ecosystem, with a focus on enabling the creation of devices and services best suited to the Indian market, Singh said.
“Our bidding objective was to secure an enabling role in the continued success of Indian operators with 3G and beyond. With its ecosystem partners, Qualcomm will now foster the deployment of LTE, so Indian consumers can enjoy the benefits of 3G now and 3G plus LTE in the future,” he added.