A year after US chipmaker Qualcomm Inc paid a billion dollar to buy broadband spectrum in the country, its plans have got stuck with Department of Telecom raising questions on its licence application.
The DoT has refused to allocate spectrum and licence to the company on grounds that the subsidiary companies which applied for licences were not introduced by Qualcomm Inc before the stipulated 90-day period after the auction.
Four circles
It has also taken a view that Qualcomm cannot be given four different licences for each of the circles where it had won spectrum.
Qualcomm had won broadband spectrum in four circles of Mumbai Delhi, Kerala and Haryana on June 12, 2010. The company then floated four companies by the name of Wireless Broadband Services and approached the DoT for different licences in each circle.
According to top DoT officials, Qualcomm's licence has been held back because its application did not fulfil the necessary conditions. They said that the US company had applied for four different licences which was not permitted under DoT rules. Secondly, the licences were applied under companies registered in India, which, the DoT says, were not introduced by Qualcomm Inc as its subsidiaries within three months of the auction.
When contacted, Qualcomm India spokesperson said that auction rules did not have any clause which required Qualcomm Inc to introduce the subsidiary companies first.
“Qualcomm Inc had nominated these four companies (at that time were fully owned Qualcomm subsidiaries) who applied for ISP licence on August 9, 2010. In the applications, these four companies explicitly stated that they are Qualcomm Inc nominees. The DoT vide their letter dated November 30, 2010, asked these four companies to submit proof of them being Qualcomm's nominees, which Qualcomm Inc. responded vide letter dated December 20, 2010. Hence, we do not understand what this issue is all about.,” Qualcomm spokesperson said.
Strategic investor
On Friday, Qualcomm wrote a letter to the DoT offering a compromise formula in which the company has agreed to take one licence and then merge the other three. “In the interest of expediting the licensing process, we have written a letter to the DoT asking, as a compromise, that DoT grant one licence instead of four. Upon doing so, we would then merge the three other entities into the fourth, which would hold the licence,” the company said.
The delay has throttled Qualcomm‘s plans to rope in a strategic investor for its broadband venture. While the company has sold 26 per cent stake to GTL and Tulip Telecom, it ultimately wanted to exit the venture. But without the licences, it can neither conclude an investment deal nor start roll out on its own.
“Since our participation in the broadband wireless auctions, Qualcomm had been systematically empowering and strengthening the LTE ecosystem. Any further delay in award of licence will deprive the Indian consumers in realising these benefits, thereby severely impacting India's broadband plans,” the company said.