Bharti to buy 49% in Qualcomm India broadband
India's largest mobile telecom service provider Bharti Airtel on Thursday announced the acquisition of 49% stake in US giant Qualcomm's broadband wireless access (BWA) business, also called 4G services, in India for $165 million (Rs. 922 crore). The company's shares rose 5.6% to Rs. 298 on the Bombay Stock Exchange following the news.business Updated: May 25, 2012 01:33 IST
India's largest mobile telecom service provider Bharti Airtel on Thursday announced the acquisition of 49% stake in US giant Qualcomm's broadband wireless access (BWA) business, also called 4G services, in India for $165 million (Rs. 922 crore). The company's shares rose 5.6% to Rs. 298 on the Bombay Stock Exchange following the news.
The acquisition will give Bharti access to four telecoms zones, including the lucrative Delhi and Mumbai, where it does not have its own 4G services. The company recently launched commercial 4G networks in Kolkata and Karnataka.Qualcomm acquired spectrum for BWA in 2010 for Rs. 4,912.5 crore through the auction route. It holds spectrum in Delhi, Mumbai, Haryana and Kerala. Though the exact financials are not known, the enterprise valuation is around $1.2 billion. The company has a debt of about Rs. 5,000 crore.
A statement by Bharti Airtel said that it had acquired 49% interest in Qualcomm's India entities for BWA licenses "partly by way of acquisition of 26% equity interest equally held by Global Holding Corporation Pvt Ltd and Tulip Telecom Ltd, and the balance by way of subscription of fresh equity in those entities."
"The agreement contemplates that once commercial operations are launched, subject to certain terms and conditions, Bharti would assume complete ownership and financial responsibility for the BWA entities by 2014 end," said the statement.
Bharti acquired BWA licenses in Kolkata, Karnataka, Punjab and Maharashtra and 3G licenses in thirteen circles in India in 2010. It can now offer 3G/4G services in 18 circles.
"This partnership will combine the strength of Bharti's national telecom footprint and Qualcomm's technological leadership in the LTE TDD space," said Sunil Bharti Mittal, chairman and MD, Bharti Airtel. "With a broadband-ready network across India, Bharti is well positioned to lead the next phase of Indian's telecom revolution."
"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," said Paul E Jacobs, chairman and CEO, Qualcomm.