The Hindu Business Line : Qualcomm, Reliance meet ends in stalemate

A marathon eight-hour meeting on Thursday between the Qualcomm delegation headed by its CEO, Mr Paul Jacobs, and Reliance Communications in Mumbai ended in a stalemate, according to sources.

"In fact, postures hardened on both sides," said one of them.

The issue of disagreement between the two is the royalty charged by Qualcomm on Code Division Multiple Access (CDMA) handsets, which Reliance Communications wants decreased.

In fact to show that it meant business, the telephony operator had, in a surprise move recently, applied for spectrum for the rival GSM technology in the prime circles of Mumbai and Delhi, saying that it was merely doing this to offer its customers the best choice available.

Sources said that neither party made any headway during Thursday's discussions. However, the Qualcomm CEO and Mr Anil Ambani, who heads Reliance Communications, were scheduled to meet over dinner again on Tuesday, possibly to continue the discussions.

Qualcomm, while being unrelenting on royalty charges, appeared to show some willingness to offer some concessions, which would be a variable of the volumes that Reliance can generate, said sources. They said that Qualcomm said it might agree to negotiate with equipment manufacturers and look at lowering the cost element of handset prices based on volumes.

Reliance Communications was also equally unrelenting in its stance, said sources. Its bargaining confidence probably comes from the fact that it is the largest mobile telephony services operator in India, the fastest growing telephony market in the world, said analysts.

They added that the relative silence of the other CDMA operator Tata Teleservices on the royalty issue could strengthen Qualcomm's case in a small way.

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