Bharti Airtel has inched closer to matching Reliance Industries' fourth generation (4G) technology-based broadband network.
The Sunil Mittal-promoted telecom company has acquired 49 per cent stake in Qualcomm's broadband venture for $165 million.
Airtel will take complete control of the venture by 2014. This will give Airtel access to lucrative markets including Delhi and Mumbai where RIL is the only player with 4G-based broadband spectrum.
Broadband presence
With the Qualcomm acquisition, Airtel will have broadband presence, through a combination of 4G and 3G, in 18 circles – just four short of Reliance Industries' 22 circles.
Qualcomm holds broadband licences in Delhi, Mumbai, Haryana and Kerala. Services have not been launched in these circles as the US chipmaker received the licences only recently from the DoT.
Airtel will move into the Qualcomm venture partly by way of acquisition of 26 per cent equity interest equally held by Global Holding Corporation Private Ltd and Tulip Telecom Ltd, and the balance by way of subscription of fresh equity.
Qualcomm had won broadband spectrum in the four circles during the auctions held in 2010 for Rs 4,912.54 crore.
In July 2010, it sold 26 per cent stake in the venture for a combined value of $57.72 million to Tulip Telecom and Global Holding Corporation Pvt. Ltd.
Airtel already has broadband licences in four circles – Kolkata, Karnataka, Punjab and Maharashtra – and 3G licences in 13 circles in India. The operator has already launched 4G services in Kolkata and Karnataka Circles.
RIL is yet to start services but plans are afoot for a mega-launch later this year. It has already snapped up a few content companies and is looking for a combination of wireless and wireline technologies.
Commenting on the partnership Mr Sunil Bharti Mittal, Chairman and Managing Director, Bharti Airtel said, “This partnership will combine the strength of Bharti's national telecom footprint and Qualcomm's technological leadership in the LTE TDD space.”
LTE TDD is one flavour of 4G technology which is being deployed in a few countries including India and China.
Qualcomm is expected 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.
Analysts said that the partnership between Airtel and Qualcomm could give RIL tough competition.
“While Airtel knows how to run a telecom business, Qualcomm has the technological knowledge. Since LTE TDD is a new technology this could prove to be crucial in a two-way fight,” said a telecom analysts.