Shortly after Reliance Communications' announced plans to roll out GSM-based mobile services, top brass of Qualcom, developer of CDMA technology, will be visiting India next week and may hold discussions with the company on royalty obligations.
Qualcom gets seven per cent royalty from CDMA operators for using the chips in CDMA-based handsets, thus inflating their operation cost.
Qualcom's worldwide CEO Paul Jacob is also likely to meet Communication and IT Minister Dayanidhi Maran, who recently had said that CDMA operators were at a disadvantage due to their royalty obligations and were unable to bring down the prices of handsets.
Reliance Communication had recently approached the Department of Telecom (DoT) seeking spectrum in the 1800 Mhz band to start GSM operations, starting with Delhi and Mumbai, a development that may cause a loss of revenue for Qualcom.
Although the company officials declined to comment on Qualcom management's proposed visit, sources said discussions may take place between Qualcom and Reliance Communications on terms of royalty payment.
Besides Reliance, Tata is another major CDMA player in India with a virtual pan-India footprint.
{{/usCountry}}Besides Reliance, Tata is another major CDMA player in India with a virtual pan-India footprint.
{{/usCountry}}DoT has also sought more details from Reliance before taking a decision on its application for release of spectrum.
The DoT is hoping to get 45 Mhz spectrum in the 1800 band by end of this year and most of GSM operators have lined up for additional frequency for their future growth.
According to sources, Qualcom has held discussions with the Government as well as operators on earlier occassions over royalty payment issues.
Sources said that Indian operators may also raise the issue of differential royalty payment by Chinese operators.