Reliance plans to switchover to GSM affects Qualcomm  

NEW DELHI: The debate over the royalty payments on the CDMA handsets has
affected Qualcomm, with its share prices dropping by nearly 15 per cent in June.

The company has lost a market capital of $11.7 billion in the last few weeks.
According to industry sources the share prices of the company dropped due to
negative reports on it after debate on the royalty payments with Reliance
Communication.

Qualcomm scrip was quoting at $47.05 on June 1 and was down by 14.8 per cent
on June 30 at $40.07.

Paul Jacobs, Qualcomm's global chief executive officer had visited India to
hold talks with Reliance after CDMA operators announced their decision to shift
to GSM services.

Reliance had demanded that Qualcomm should reduce its royalty as it was
coming in the way of cheaper handsets. But, Qualcomm declined to negotiate on
royalty but offered volume discounts on handsets, which was rejected by
Reliance.

When asked about Reliance stand on the royalty payments issue, S.P. Shukla,
president, Wireless Business, Reliance Communications refused to comment, but
said an announcement would be made on it soon.

Although, Qualcomm is understood to have said that they would discuss the
matter with equipment manufacturers in order to look at reducing handset prices
based on large volumes, Reliance stuck to its guns on lowering the royalty
payment.

Reliance Communications had last month approached the ministry of
Telecommunications, seeking spectrum to start GSM-based mobile services in Delhi
and Mumbai.

According to a recent report from Global Mobile Service Association (GSA), as
many as 25 CDMA operators worldwide, including Reliance, are contemplating to
switch over to the GSM family.

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