Rumor mill: Qualcomm close to selling BWA licenses to Bharti Airtel

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Qualcomm (NASDAQ:QCOM) may be close to selling the 2.3 GHz Broadband Wireless Access (BWA) licenses that it battled to acquire in India.

Numerous reports from Indian media say Bharti Airtel, which just launched TD-LTE in Kolkata this week, is nearly ready to buy the venture holding Qualcomm's BWA licenses but is holding back pending receipt of more information on the Indian government's plan to auction 700 MHz licenses. The federal government has not given a schedule for the auction other than to say it will take place at some point through March 2013. But the government is also planning to reauction 2G licenses that were canceled in February by India's Supreme Court.

The Economic Times reported that a source close to the situation said Bharti would pay Rs 6000 crore ($1.16 billion) for Qualcomm's licenses in a deal likely to be closed by June.

Bharti, India's largest telecom company by customers, is anxious to rollout LTE to more Indian markets and may jump on Qualcomm's BWA licenses if it looks like the 700 MHz auction may be delayed. A Qualcomm spokesperson declined to confirm or deny the reports, telling FierceBroadbandWireless, "We do not comment on rumors and have no updates on this to share at this time."

The companies have been courting each other for more than year, but due to disputes with the Indian government Qualcomm has not actually had the licenses in hand to sell. Its Indian venture, which has 32 percent ownership by local partners due to government requirements, saw its licenses canceled last year because the telecom department alleged the company did not apply for the permits within three months of the auction and had applied under multiple company names in violation of auction guidelines.

After months of ongoing legal maneuvers, the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) last month ruled in favor of Qualcomm's India operation, paving the way for the company to receive its spectrum in about 10 days.

Qualcomm bid more than $1 billion during the 2010 BWA auction for licenses in the Delhi, Mumbai, Kerala and Haryana service areas. The company later said it bought the licenses solely to ensure LTE was deployed in India and never intended to operate a network or compete with its operator partners.

Though Bharti would prefer to have 700 MHz spectrum rather than BWA 2.3 GHz spectrum, if it were to buy Qualcomm's licenses now it could quickly launch LTE in the critical markets of Delhi and Mumbai, where it does not yet hold licenses.

Bharti paid $740 million for BWA licenses in Karnataka, Maharashtra, Kolkata and Punjab. The company will eventually face steep competition from Reliance Industries, which won BWA licenses covering the entire country and is expected to launch LTE in the third quarter.

For more:
- see this Economic Times article
- see this Firstpost article
- see this Wall Street Journal article (sub. req.)

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