New Delhi, July 30: US-based Qualcomm today sold a 26 per cent stake in its Indian broadband unit to Global Holdings Corporation and Tulip Telecom for $58 million (Rs 267 crore).
The yet-to-be-named venture will commence operations from next year. The mobile chip maker had won broadband wireless access spectrum in four circles in the auction held last month.
Qualcomm sold the stake to meet FDI rules that mandate at least 26 per cent Indian holding in a telecom venture.
Tulip Telecom and Global Holdings have picked up 13 per cent each in the joint venture by investing $28.86 million, or Rs 133 crore.
Tulip chairman H.S. Bedi said, For us, this is an opportunity to play a significant role in addressing the demand for high-bandwidth mobile broadband services in India.
Qualcomm, which has set up a holding company in Asia for the India business, now owns 74 per cent in the joint entity through an investment of $164.3 million (Rs 756 crore).
Qualcomm plans to bring in other 3G and broadband service providers as partners.
The India-registered venture will have an enterprise value of $1.11 billion (Rs 5,106 crore), with $222 million (Rs 1,021 crore) as equity and $888 million (Rs 4,085 crore) as debt, said Qualcomm India president Kanwalinder Singh.
The stake sale needs the approval of the Foreign Investment Promotion Board. Qualcomm also has to apply for an Internet service provider licence. We expect to get all government approvals and the relevant licences in the next few months and would be ready to launch broadband services by 2011, said Singh.
Qualcomm spent over $1 billion (Rs 4,600 crore) to acquire broadband spectrum in Delhi, Mumbai, Haryana and Kerala.
The California-based chip maker had earlier said it would exit the venture after creating a long-term evolution, or LTE, network to roll out broadband wireless access services.
LTE is a technology offering high-speed broadband and multimedia services.
Tulip Telecom is a network service provider. Global Holdings, which has stakes in GTL Limited and GTL Infrastructure, provides network services to mobile operators and manages telecom towers.
Through this venture, we will look forward to sharing our expertise in the network services and telecom tower infrastructure, Global Holdings Group founder Manoj Tirodkar said.
Qualcomm sells chips used in cellphones and is a pioneer in CDMA-based wireless technology. The US company will compete, among others, with Bharti Airtel and Mukesh Ambani-led Reliance Industries, which bought a majority stake in Infotel Broadband the only company to get a pan-India broadband licence.
The broadband spectrum auctions were part of the governments efforts to boost Internet connectivity.
The National Broadband Policy, announced in 2004, had set a goal of 200 lakh connections by 2010, but the target is unlikely to be met.
The Telecom Regulatory Authority of India has estimated that there will be around 480 lakh broadband users by 2012 and about 10 crore by 2014.