Qualcomm sells 26 percent stake to Global Holding and Tulip

NEW DELHI - California-based cellphone chipmaker Qualcomm Friday sold 26 percent stake in its Indian arm to Global Holding Corporation and Tulip Telecom to form a joint venture to roll out its broadband services in the country.

According to the deal, Global Holding and Tulip Telecom will each take a 13 percent stake in Qualcomm for $28.86 million while Qualcomm will hold remaining 74 percent by investing $164.3 million.

“Our objective was to secure initial shareholders who are operator-neutral, yet bring strong telecom and broadband experience, and we are extremely pleased we met that objective with Global Holding and Tulip Telecom,” said Qualcomm India president Kanwalinder Singh.

Global holding Corporation offers network services to Indian mobile operators and has the largest, independent telecom tower infrastructure. Tulip telcom provides data connectivity services.

The venture, with an enterprise value of $1.11 billion, will have $222 million as equity and $888 million as debt after the deal is closed, the three companies told reporters.

Qualcomm recently won a license and bandwidth to offer wireless broadband in four service areas of Delhi, Mumbai, Kerala and Haryana at a cost of $1.045 billion.

Under the guidelines issued by the department of telecommunication (DoT), it is necessary for foreign players participating in the 3G and broadband wireless access auctions to partner with Indian companies.

According to DoT, only an Indian company can have unified access services licence or an internet service provider licence.

Qualcom is planning to launch its broadband services by 2011.

Singh said Qualcom had opted for LTE (long term evolution) technology over WiMax as it was best suited for high bandwidth mobile broadband services.

He said the company will apply for Internet service provider licence after getting approvals for the deal and will create four companies as part of venture for the four service areas.