Cingular deal may help Nokia talks: CEO

Customers look over phones and accessories at a Cingular Wireless store in Atlanta, February 17, 2004. Qualcomm Chief Executive Paul Jacobs said on Thursday that talks with Nokia on renewing a technology license may be helped by AT&T Inc.'s decision to use Qualcomm's mobile television technology.

NEW YORK (Reuters) - Qualcomm (QCOM.O) Chief Executive Paul Jacobs said on Thursday that talks with Nokia (NOK1V.HE) on renewing a technology license may be helped by AT&T Inc.'s (T.N) decision to use Qualcomm's mobile television technology.

AT&T's Cingular Wireless, which already uses GSM mobile phones from Nokia, plans to add Qualcomm's MediaFlo mobile TV chips to its phones.

The move could be a way to bring Nokia and Qualcomm together, Jacobs said at a Bank of America technology conference in New York.

Nokia, the world's biggest mobile phone maker, and Qualcomm have been negotiating a renewal of a technology licensing agreement that expires April 9. They have disagreed over how much Qualcomm charges for technology licenses.

"The MediaFlo deal with Cingular is a new fact. Maybe there's a way to find some new common ground there," Jacobs said.

However, on the sidelines of the conference, Jacobs said Nokia and Qualcomm had not discussed the matter, and their talks were still "pretty much at deadlock." He added that it may take external forces, such as legal action, for a resolution.

"I'm still hopeful we'll find some solutions that don't require a judge coming down and imposing something on us, but as I said the teams are still locked," Jacobs said.

In addition to the contract dispute with Nokia, Qualcomm faces multiple patent lawsuits and an International Trade Commission complaint from chip rival Broadcom Corp. (BRCM.O), as well as European regulatory complaints filed by several companies.

Thus, when asked whether Qualcomm would be willing to take on some debt, Jacobs said he would prefer to have the flexibility of having cash on its balance sheet. Qualcomm had no long-term debt at the end of December.

"I'm not that excited about being very leveraged. I figure you have a lot more power if your balance sheet is strong," he said, adding that while Qualcomm is not planning a $10 billion acquisition, "there's a lot of opportunity out there ... having flexibility is good."

He added, "If somebody tries to attack you, it could affect your cash flow and your ability to pay (debt) back."

Qualcomm had $2.65 billion in cash and equivalents on its balance sheet at the end of December.

When asked about share buybacks, Jacobs said, "I'm very sensitive to the fact people want us to return cash."

Qualcomm shares rose 22 cents to $42.27 in morning trading on the Nasdaq.