Credit: Shutterstock photoRecently, Reuters reported that Qualcomm Inc. ( QCOM ), the leading chipset maker for mobile handsets worldwide, intends to dispose its remaining 74% stake in Broadband Wireless Access (BWA) spectrum in India to the local operator Bharti Airtel. However, it is still unknown when the deal will be completed and what will be its financial terms.
In 2010, the Government of India concluded a spectrum auction for both 3G networks and broadband wireless access, where Qualcomm paid $1.045 billion to obtain the operating license in four major service areas of New Delhi, Mumbai, Kerala and Haryana.
Qualcomm plans to divest its full stake after creating a next-generation (4G) LTE (Long-Term Evolution) network to roll out super-fast broadband wireless access services. LTE is the emerging mobile technology that offers extremely fast broadband access speed and high-end multimedia services.
The fast-growing broadband market is attracting billions of dollars for introducing LTE networks in India in the coming years. As of now, after China, India is the second-largest mobile phone market with respect to subscriber count. Despite of over 800 million wireless subscribers, the broadband penetration rate is a mere 2%. This makes India the investment hub for telecom operators and gear makers.
In July 2010, Qualcomm sold 24% stake of its Indian broadband venture to Indian telecom operators Global Holdings Corp. and Tulip Telecom Ltd. for a total consideration of around $58 million. Negotiations between Qualcomm and Bharti Airtel had been going on for more than a year. In 2011, The Economic Times reported that Bharti Airtel may offer around $1.2 billion-$1.3 billion to acquire the remaining 74% stake of the venture.
The fast growing broadband market is attracting billions of dollars for rolling out LTE networks in India in the coming years. Some of the companies willing to pitch their wares through Qualcomm are Alcatel-Lucent ( ALU ), Ericsson AB ( ERIC ), Huawei Technologies Co. Ltd., Nokia Siemens Networks -- a joint venture between Nokia Corp. ( NOK ) and Siemens AG ( SI ) -- and ZTE Corp.
ALCATEL ADS (ALU): Free Stock Analysis Report
ERICSSON LM ADR (ERIC): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
QUALCOMM INC (QCOM): Free Stock Analysis Report
SIEMENS AG-ADR (SI): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
