Qualcomm has agreed to sell 26 percent stake in its India broadband venture to Indian firms Global Holdings and Tulip Telecom for about $58 million, the U.S.-based mobile chip supplier said on Friday.
Global Holdings, which owns telecoms infrastructure firms GTL Ltd and GTL Infra, and communications services provider Tulip Telecom will buy 13 percent each in the newly formed Qualcomm's broadband unit in India.
Qualcomm spent about $1 billion to buy wireless airwaves in a recent auction in India. The company is betting that ownership of the airwaves in India will boost sales of advanced cell phones and the chips that power them.
According to Indian laws, Qualcomm's stake in the Indian broadband venture cannot exceed 74 percent, and the remaining stake should be owned by Indian companies.
Qualcomm's equity investment for 74 percent stake in the broadband unit will be $164.3 million, the company said.
Qualcomm expects to get broadband spectrum in two to three months time and aims to launch broadband services in 2011, said Kanwalinder Singh, president for Qualcomm's Indian and South Asian operations.
Qualcomm, which previously won spectrum bids in the United States and Britain, bagged wireless broadband spectrum in four of India's 22 telecoms zones, including the lucrative Delhi and Mumbai cities.
Qualcomm will compete in India with billionaire Mukesh Ambani's Reliance Industries that made a dramatic return to telecoms after agreeing to buy the only company that had won wireless broadband spectrum in all 22 zones.
India's broadband penetration -- connections per 100 people -- is extremely low at 0.7, whereas more than half of the population have a telephone, according to the Indian telecoms regulator.
Consolidation is underway in India's telecoms tower sector as carriers opt for mergers or alliances to be cost efficient.
In June, GTL Infra agreed to buy the telecoms tower business of Reliance Communications, to create what it said would be the world's largest telecoms infrastructure firm not controlled by an operator.
In January, GTL Infra agreed to pay $1.8 billion for Aircel's towers. A month later, U.S.-based American Tower Corp announced plans to buy the tower unit of Essar Group for $432 million.
By 1.05 p.m. (0735 GMT), shares in GTL Infra was 0.7 percent higher at 46.25 rupees and Tulip Telecom was nearly unchanged at 185 rupees in the benchmark Mumbai market that down 0.2 percent.