India Rejects Qualcomm License Bid

The Telecom Ministry has rejected Qualcomm Inc’s application for a licence to provide Internet services, the US chipmaker said on Thursday, casting uncertainty over its India plans after it paid $1 billion to buy broadband spectrum last year.Qualcomm said the application was rejected on grounds that it found to be “baseless”. It did not give details and a company spokeswoman declined to comment beyond the official statement.

India's telecoms ministry has cited Qualcomm missing the deadline for applying for the Internet service providers' licence as one of the reasons for rejecting the application, two sources with knowledge of the matter told Reuters.According to the broadband spectrum auction rules, firms that won wireless airwaves in last year's auction were required to apply for the licence within three months of being declared winners, the sources said.

Telecom companies spent a total $24 billion, far more than expected, in a state auction last year to buy radio airwaves for third-generation (3G) and broadband services, with most of it funded by debt.Qualcomm said in a statement that it fully complied with the application process and it would work with the Indian authorities to resolve this matter.The ministry's move will delay the company's plan to launch broadband wireless services in India, for which it had spent $1 billion buy wireless airwaves in Mumbai, New Delhi, Haryana and Kerala circles in an auction last year.

Any license cancellation could further dent foreign investor interest in India's telecommunications sector, which is already waning after allegations that the allocation of mobile bandwidth and licenses in 2008 were rigged.Qualcomm won the four bandwidth slots in a government-run auction that ended June 12. Under the auction rules, it needed to apply for the ISP licenses within three months from July 12. Qualcomm said it applied on Aug. 9, 2010 -- within the stipulated limit. The DoT, however, said while Qualcomm did initially apply in August, it gave a revised application in December, missing the deadline.Qualcomm added that it will merge the four nominee companies it created into one to adhere to the rule stipulating only one nominee firm would be granted.