May 16, 2012 / 12:50 PM / 7 years ago

UPDATE 1-Bharti in talks for stake in Qualcomm India unit-sources

* Bharti initially eyeing 26 pct in Qualcomm 4G venture

* Bharti eyes stakes owned by Global holding, Tulip

* Bharti may pay premium over Global, Tulip 2010 investments

By Devidutta Tripathy and Sumeet Chatterjee

NEW DELHI/MUMBAI, May 16 (Reuters) - Bharti Airtel , India’s biggest mobile phone carrier, is in advanced talks to buy out the Indian partners of Qualcomm Inc in a fourth-generation (4G) broadband venture in the country, two sources with direct knowledge of the talks said on Wednesday.

Qualcomm, which spent nearly $1 billion to buy 4G radio airwaves in a 2010 Indian state auction, had sold a total 26 percent stake to Indian companies Global Holding Corp and Tulip Telecom for about $58 million to comply with the sector’s foreign holding rules.

The venture’s equity value was about $223 million and enterprise value, which includes debt, was more than $1 billion in 2010 when it entered into the stake sale agreements with the two Indian companies.

Both sides are still negotiating valuations, but Bharti will likely pay “some premium” over what Global Holding and Tulip paid in 2010, one of the two sources said, adding that Qualcomm was not planning to reduce its stake immediately.

“What is planned is that Bharti will make further investments in the company in future and new shares will be issued to them. That automatically dilutes (the) Qualcomm holding,” the source said.

Both the sources declined to be named as the talks are not public yet. Bharti and Global Holding declined to comment, while Qualcomm and Tulip were not immediately available.

The sources said details were still being worked out and there is no clarity yet on when an agreement might be reached. Qualcomm wants to close the deal as soon as possible as it prepares for rollout of services, they said.

If Bharti comes on board, Qualcomm will get a carrier partner with experience in operating 3G and 4G networks.

The deal will give Bharti access to four telecoms zones, including the lucrative Delhi and Mumbai cities, where it does not have its own 4G airwaves.

Bharti, which won 4G airwaves in just four of India’s 22 telecoms zones, has said it would like to have a nationwide 4G broadband network. The company recently launched commercial 4G networks in Kolkata and Bangalore cities.

Qualcomm, which was embroiled in a dispute with the Indian telecoms ministry, was granted the 4G airwaves this month, nearly two years after it won them in the auction. The ministry cut the usage period of the airwaves by 18 months.

Qualcomm, which is pushing for the deployment of LTE (long-term evolution) broadband technology in India, has previously said it is looking at one or more operator partners in the India broadband venture.

Reliance Industries, controlled by India’s richest man Mukesh Ambani, is the only company to have 4G airwaves in all 22 telecoms zones in India. Reliance is yet to start commercial services.

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