HIGH-STAKES BWA BATTLE Bharti Hikes Stake in Four Qualcomm Entities to 51% Telco can take faster decisions on rollouts in markets where it faces Rel Infocomm

Bharti Airtel, the world's fifth-largest mobile phone company by number of subscribers, has raised its stake to 51% in four entities of Qualcomm's wireless broadband business in India. As a result, the entities that hold wireless broadband or broadband wireless access (BWA) licences in four circles of Delhi, Mumbai, Haryana and Kerala, have become subsidiaries of Bharti Airtel. India's largest carrier had acquired 49% in the four entities in May last year for $165 million, or . 924 crore, at exchange rates prevalent at that time, with the intent of completely acquiring them by 2014-end. 

Bharti Airtel did not reveal at that time the amount it would pay to fully own Qualcomm's subsidiaries or the amount paid for acquiring the additional 2%. Qualcomm had paid . 4,900 crore for obtaining BWA permits in four circles in 2010 in a government auction and then brought on board Tulip Telecom and Global Holdings to own 26% of the entities, in accordance with Indian investment rules that allow foreign companies to invest a maximum of 74%. 
Bharti Airtel now has BWA permits in eight circles, including Kolkata, Karnataka, Punjab and Maharashtra, which it purchased in a government auction two years ago for . 3314.36 crore. The telco's stock surged 2.38% to close at 301.25 on the Bombay Stock Exchange. 
With a controlling stake in place, the Sunil Mittal-owned telco will be able to take quicker decisions on network tie-ups and rollouts in the key markets of Delhi and Mumbai, where rival Reliance Jio Infocomm also intends to launch BWA services, a senior analyst with a large consultancy firm said, requesting anonymity. This analyst added that Bharti could look at closing deals with network providers within a short time frame as it prepares for launch in the two circles. 
RIL did not respond to an ET query seeking its perspective on the changes it foresees in the market in the context of this change in equity holding. 
Qualcomm's intent was to provide technical assistance to Bharti in connection with network architecture and optimisation, infrastructure and device testing, as well as continuing to develop and support the underlying technology and the LTE TDD ecosystem. A Qualcomm spokesperson said it did not have anything to share beyond Bharti's announcement. The company did not respond to an ET query seeking clarity on whether it would look at forging partnerships with players such as Reliance Jio to expand the LTE ecosystem in India. The USbased chipmaker had to engage in an epic tussle with DoT to operationalise its broadband licenses. 
This was on account of delays and difficulties in obtaining internet service provider (ISP) licences which were needed to offer BWA licences. Some of these delays were on account of problems that Tulip Telecom, which had invested about $28 million to own 26% in Qualcomm's India venture, had with DoT. The telecom department had claimed dues from Tulip Telecom from 2006 to 2011, following which Qualcomm moved the telecom tribunal TDSAT and offered to pay . 410 on behalf of Tulip, in order to get the licence from the government. 
However, while giving licences, DoT had reduced the licence period to 18.5 years from 20 and gave only three-andhalf years to complete rollout obligations instead of five years. DoT told the tribunal that the company had several issues with its application, which led to delays. Eventually, TDSAT ruled in Qualcomm's favour and told the government to offer licence for the full tenure. DoT gave Qualcomm the licence after 18 months of delay.