Date:16/06/2006 URL: http://www.thehindubusinessline.com/2006/06/16/stories/2006061602810400.htm

Back Royalty issue: Qualcomm CEO likely to visit India

Our Bureau

Tata Teleservices not considering GSM roll-out for now

MR PAUL JACOB

New Delhi , June 15

Under pressure from the industry and the Communication Ministry to lower its royalty rates, the US-based CDMA technology promoter firm Qualcomm's worldwide Chief Executive Officer, Mr Paul Jacob, is likely to visit India next week.

Mr Jacob is expected to meet the Communication and IT Minister, Mr Dayanidhi Maran, and CDMA operators as well. The move comes after India's largest CDMA player Reliance Communication announced its plans to roll out GSM-based cellular services in the country.

The agency responsible for Qualcomm India's press relations said that Qualcomm Inc had not made any announcement in this regard yet. Mr Kanwalinder Singh, President, Qualcomm India, could not be contacted as he is away at the company's global headquarters in San Diego. However, industry sources said Mr Jacob's visit has been scheduled for next week.

Reliance had earlier requested Qualcomm to bring down its royalty from the current levels of 7 per cent, as it was adding to the cost of services. Sources pointed out that in China, Qualcomm was charging a royalty of only 2 per cent.

Mr Maran is also understood to have observed recently that CDMA operators were at a disadvantage due to their royalty obligations, which made it difficult to bring down the prices of handsets.

Qualcomm stand

However, Qualcomm has maintained that the royalty was being charged from handset manufacturers and not the operators and, therefore, the additional cost was only marginal.

Industry observers also pointed that while equipment majors and handset manufacturers are setting up base in India to manufacture GSM gear, no CDMA player has announced manufacturing plans.

Meanwhile, the other CDMA operator in India - Tata Teleservices said that it was not considering rolling out GSM services. Tatas said that it was closely watching Reliance's application to offer GSM services in the country.