4G services, Bharti Airtel to acquire 49 percent stake in Qualcomm

 Sunil Mittal led Bharti Airtel on Thursday announced that it will acquire 49 per cent stake in Qualcomm's Inc's fourth-generation (4G) broadband venture in the country for $165 million. 

Bharti Airtel will buy a 26 per cent stake held by two Indian partners in the Qualcommbroadband venture and the remaining by subscribing to fresh equity, the company said in statement. 
The company plans to take full control of theBWA entities by 2014. Qualcomm expects to provide technical assistance to Bharti in connection with network architecture and optimization, infrastructure and device testing, as well as continuing to develop and support the underlying technology and the LTE TDD ecosystem. 

The deal will give Bharti access to four telecoms zones, including the lucrative Delhi and Mumbai cities, where it does not have its own 4G airwaves. 

Bharti, which won 4G airwaves in just four of 22 telecom zones - Kolkata, Karnataka, Punjab and Maharashtra, has said it would like to have a nationwide 4G broadband network. The company recently launched commercial 4G networks in Kolkata and Bangalore cities. 

Shares of Bharti Airtel provisionally closed at Rs 297.75, up 5.6 percent on the Bombay stock Exchange. It hit an intraday high of Rs 301.50 and a low of Rs 281. 

Commenting on the partnership Sunil Mittal, Chairman Bharti Airtel said, "We are delighted to partner with Qualcomm, who shares our commitment to the government's agenda of broadband for all." 

"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. We are pleased to have Bharti's participation and support in this effort," said Dr Paul E Jacobs, chairman and CEO of Qualcomm. 

Qualcomm, which was embroiled in a dispute with the telecoms ministry, was granted the 4G airwaves this month, nearly two years after it won them in the auction. The ministry cut the usage period of the airwaves by 18 months. 

Qualcomm, which spent nearly $1 billion to buy 4G radio airwaves in a 2010 Indian state auction, had sold a total 26 percent stake to Indian companies Global Holding Corp and Tulip Telecom for about $58 million to comply with the sector's foreign holding rules. 

The venture's equity value was about $223 million and enterprise value, which includes debt, was more than $1 billion in 2010 when it entered into the stake sale agreements with the two Indian companies. 

Qualcomm, which is pushing for the deployment of LTE (long-term evolution) broadband technology in India, has previously said it is looking at one or more operator partners in the India broadband venture. 

Reliance Industries, controlled by India's richest man Mukesh Ambani, is the only company to have 4G airwaves in all 22 telecoms zones in India. Reliance is yet to start commercial services.