Global Group may buy 13% stake in Qualcomm JV - report

Global Group of India is in talks to buy a 13 percent stake for about USD 50 million in a broadband wireless venture likely to be formed with Qualcomm, reports the Wall Street Journal citing a person familiar with the matter. A second person familiar with the matter said India's Tulip Telecom is also in talks with Qualcomm to pick up some or all of a 13 percent stake in the venture. Global Group is the holding company of GTL and GTL Infrastructure. The first person familiar with the matter did not specify which of the Global Group entities would participate in the venture. The talks are still on and the valuation could change as talks progress, this person said. Qualcomm India and South Asia president Kanwalinder Singh said at a New Delhi news conference that the company plans to announce its new partner or partners within a month. The company cannot comment on the partner strategy and related details at this point, Singh said in an e-mailed statement when asked about possible talks with Global Group and Tulip Telecom. Qualcomm has said it will set up a venture in India in which it will offer as much as a 26 percent stake to one or more local partners, as per Indian regulations. It plans to exit the venture after creating a long-term evolution network to roll out high-speed broadband wireless-access and multimedia services. The first person familiar with the matter said Qualcomm could invest about USD 300 million as equity in the venture. The investment and the structure are still being discussed, the person added. Analysts said Qualcomm would face high licensing costs in India. On a pan-India basis, a subscriber base of 55-65 million would be required to build a reasonable business case, Protiviti Consulting's managing director Mritunjay Kapur said, adding that it might take four to five years for companies to break even.