Telecom service provider Bharti Airtel has increased its stake in Wireless Business Services (WBSPL), a company founded by US chipmaker Qualcomm, to 93.45 percent at an estimated cost of about Rs 875 crore.
FINAL UPDATE: Airtel on Friday said it increased its stake in Wireless Business Services Private Limited to 100 percent. This means, Qualcomm has exited from this venture and Wireless Business Services Private Limited will be a wholly-owned subsidiary of Bharti Airtel.
PTI on Thursday reported that Bharti Airtel holds 93.45 percent and Qualcomm Asia Pacific holds 6.55 percent equity in WBSPL that holds BWA spectrum in four areas — New Delhi, Mumbai, Haryana and Kerala.
Airtel, which will be competing with Reliance Jio Infocomm, a subsidiary of Reliance Industries (RIL) has the similar spectrum in Punjab, Maharashtra, Kolkata and Karnataka. Reliance Jio is in the process of rolling out 4G in select parts of India.
Qualcomm invested in BWA spectrum in these 4 circles to promote 4G in India and later to find a suitable partner.
In 2010, several telecom operators were expecting that the BWA spectrum would be utilized to launch WiMax – supported by chip major Intel and a rival of Qualcomm – in the Indian telecom industry and take broadband to the next level.
But WiMax failed to take off across the world as 4G LTE started offering high speed broadband to customers — in trials. Indian telecom operators, which were planning to utilize WiMax, backed out and focused other technologies.
Reliance Jio Infocomm, which is the pan India 4G licensee, did not launch 4G in the last three years due to lack of a strong business case in India.
Recent media reports suggest that Airtel will be launching 4G services in New Delhi using TD-LTE technology. Chinese telecom equipment vendor Huawei will be the supplier in Delhi.
In July this year, Bharti Airtel acquired a majority stake in WBSPL by increasing its stake to 51 percent from 49 percent.
The company had acquired a 49 percent stake in WBSPL in May 2012 for $165 million. At that price, the additional stake purchase would have cost Airtel an estimated $143 million, or Rs 875 crore at today’s closing exchange rate, PTI reported.
Airtel has launched 4G services in Bangalore, Pune, Kolkata, Chandigarh, Mohali and Panchkula. But 4G uptake is slow due to lack of quality coverage, speed, availability of LTE handsets.
