Qualcomm to review investment plan
Our Corporate Bureau in Mumbai
Published : December 28, 2002
The Reliance group and the San Diego-based Qualcomm Inc will both review the latter’s option of investing $200 million in Reliance Infocomm.
Mukesh Ambani, chairman of Reliance Infocomm, today said, “We both have option of reviewing the investment in six months.”
Qualcomm , however, has as yet not invested in Reliance’s Infocomm venture, even after signing the agreement in January this year.
Qualcomm had desisted from making the investment due some alleged delays in the implementation of the Infocomm project, as had been agreed upon between the two earlier.
Qualcomm extended its agreement to invest in the equity of Reliance Infocomm, after the agreement got over in June 31.
Ambani did not however spell out what was the alternative plan in case Qualcomm pulled out of the agreement. The total project cost is of Rs 25,000 crore of which Rs 8,000 crore is to be equity contribution.
The US technology major Qualcomm had announced that it will pick up almost four per cent in Reliance Infocomm, then Reliance Communications.
It is a the supplier of the code division multiple access (CDMA) technology that Reliance is using for its limited mobility services.
Qualcomm owns the proprietary rights of the CDMA technology and gets royalty from vendors that manufacture CDMA equipment.
Globally, the royalty is invested back as equity in the telecom service providers offering CDMA based services.
The investment, if Qualcomm eventually agrees, is expected to be in tranches depending on Reliance’s order size for CDMA equipment with Qualcomm’s vendors.
Reliance has already placed an orders worth $500 million from LG and Samsung for CDMA handsets.
Reliance Infocomm is offering free handsets worth Rs 10,500 based on CDMA technology under Dhirubhai Ambani Pioneer scheme.
The customer will also have a choice and will be able to choose his own handsets from the four scheme platinum, gold, silver and topaz offering the handset at Rs 7,000-10,000, Rs 3,000-Rs 5000 and Rs 1,500, respectively. |
