Qualcomm plans SW, chip unit in India

CIOL Bureau
New Update

NEW DELHI: U.S. mobile phone technology company Qualcomm plans to set up a software development and chip design unit in India to benefit from the country's relatively cheap development costs, a top company official said.


Paul Jacobs, group president for Qualcomm's wireless and Internet business, told reporters on Wednesday the centre was in the "very late stage of consideration".

"We are actively looking at possibilities for chip and software development services," Jacobs said. "It would be a large number of people ... over 100. The amount to be invested would be significant."

India's rapidly improving telecoms infrastructure and a growing army of lower cost English-speaking workers has been a magnet for global corporations seeking to reduce costs.

Many companies source their software requirements from India's booming software services industry, or have set up their own units in the country.

Qualcomm is already a major player in India's flourishing wireless sector, the fastest growing market in the world, through its chips in CDMA handsets being sold by several operators in the country.


Qualcomm owns most of the patents to CDMA, or Code Division Multiple Access, the world's second most widely used wireless technology standard. It supplies about 90 percent of the chips for CDMA phones.

The technology is being used by Reliance Infocomm Ltd, India's top CDMA-based mobile services firm, to provide wireless facilities to 6.5 million users out of India's total installed base of more than 31.5 million customers.

Reliance Infocomm is 45 percent owned by Reliance Industries Ltd, India's top petrochemicals giant.


Jacobs said he expected 13 million CDMA handsets to be sold in India in the year to September, 2004 because of roaring demand for mobile services in the country where three in 100 people own a mobile phone compared with more than 20 in China.

He said Qualcomm had shelved plans to take a minority stake in Reliance Infocomm as the company had already rolled out its nationwide network without Qualcomm's cash.

"At this point there are no discussions. At the end of the day they (Reliance Infocomm) were able to launch the network without any investments from Qualcomm," Jacobs said.

Qualcomm had plans to invest up to $200 million in Reliance's telecoms business in exchange for a four percent stake.

(Additional reporting by Unni Krishnan)

© Reuters