Bharti said to close in on Qualcomm deal

Dylan Bushell-Embling
17 May 2012
Daily News

Multiple reports claim that Bharti Airtel is in the final stages of negotiations to buy into - and maybe eventually buy out – Qualcomm's Indian venture and its TD-LTE spectrum.

Both Reuters and Bloomberg have reported that Bharti is close to a deal to buy out the 26% stake in the Indian venture currently held by local partners Tulip Telecom and Global Holdings.

A price has yet to be finalized, but some of the sources claim that Bharti Airtel is likely to pay a small premium on the sums that Tulip Telecom and Global Holdings paid for the stake.

Qualcomm sold two 13% stakes in the venture to Tulip Telecom and Global Holdings in order to comply with India's 74% foreign direct investment cap on mobile operators. The Indian partners paid 1.4 billion rupees ($25.8 million) each for the stakes.

One report indicates that Qualcomm is looking to eventually sell the entire venture to Bharti Airtel for around 50 billion rupees ($920.1 million), but the sources were also clear that Qualcomm plans to maintain a holding in the company for at least the next two years.

Any divestment would be likely to take place progressively, potentially through share allocations to Bharti Airtel, which would dilute Qualcomm's stake.

As India's largest mobile operator by subscribers, Bharti Airtel would be an invaluable partner for the venture. In exchange, the operator would gain access to 4G spectrum in four more circles, including the crucial Delhi and Mumbai regions.

Bharti Airtel currently only has TD-LTE spectrum in four of India's 22 circles, having paid 33.14 billion rupees for the holdings during the 2010 BWA auctions.

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