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G. Rambabu

NEW DELHI, Jan. 7

RELIANCE has finalised a multi-million dollar deal with technology major Qualcomm Inc, whereby the US-based pioneer of CDMA technology would pick up strategic equity stake in its telecom venture, Reliance Communications Ltd.

According to highly placed sources, an agreement to this effect is to be signed on Thursday in the presence of Dr Irwin Mark Jacobs, Chairman and CEO, Qualcomm Inc, and Mr Jeff Jacobs, President, Global Business Development, Qualcomm Inc, at Mumbai.

While it is understood that Qualcomm has committed over $220 million for this purpose, company officials were not willing to disclose the exact amount as yet. This deal assumes significance given the fact that Qualcomm's CDMA technology has been licensed to over 80 leading communications manufacturers worldwide. It is considered as the pioneer of CDMA chipsets and system software.

Reliance, meanwhile, already holds the licence to provide basic services in 18 circles across the country. It has publicly stated that it will be deploying these services on the CDMA platform, to offer wireless in local loop (WLL) limited mobility services.

With the necessary infrastructure (optical fibre cables) being deployed across the country, the basic service operations are scheduled to be launched in the next couple of months. This equity infusion by Qualcomm would therefore supplement the company's network rollout plans, the sources said. They also noted that this deal is just the first in a series of agreements being worked out between both the groups. Apart from equity participation, both the companies were also working on two other major agreements, which are to be finalised soon.

The first involves technology transfer and licence to set up a handset-manufacturing unit for CDMA handsets, while the next deal in the offing is that of Qualcomm being retained as a "one-stop technical consultant" for the deployment of the Reliance CDMA network in 17 circles across the country.

The exact modalities of the remaining two agreements are yet to be worked out.

"The talks on this front are still in a preliminary stage and nothing has been committed as yet," they said. They, however, did not rule out the possibility of a joint venture company for the purpose of manufacturing CDMA handsets. Currently, all the handset requirements are being sourced from abroad, particularly South Korea, which has adopted the CDMA technology for its mobile services.

Reliance, meanwhile is keeping its options open regarding consultancy for its CDMA network.

While it makes more sense to appoint Qualcomm as the "one-stop" consultant, it is also working out separate deals with other CDMA technology providers. For instance, only last week, a three-year $10-million contract was signed with KTF, South Korea, to provide consultancy and technical information on CDMA technology, the sources said.

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