Tata fails to connect with Qualcomm over royalty

New Delhi, June 27: Tata group chairman Ratan Tata and his seven-member delegation have failed to convince Qualcomm chief Paul Jacobs to bring down the 7% royalty charged on CDMA handsets sold in India.

Jacobs expressed his inability to reduce royalty during his meeting with Tata on Tuesday evening. This was Jacobs' first meeting on his India tour. He is scheduled to meet communications minister Dayanidhi Maran on Wednesday and Reliance Communications chairman Anil Ambani on Thursday, both of whom will also demand lower royalty.

Tata group's Tata Teleservices Ltd (TTSL) is the second largest CDMA operator in the country.

Sources said Tatas also sought parity between GSM and CDMA handsets at the operator level but the Qualcomm chief said that since CDMA was a superior technology a $3 differential was bound to be there. However, this would come down over the next four to five years. Tatas are believed to have expressed their unhappiness at this.

Qualcomm chief met with a seven-member Tata delegation, which included Tata and TTSL's CEO, Darryl Green, and discussed ways and means to further develop CDMA technology and offer new state-of-the-art services. While Indian players pay 7% royalty to Qualcomm, in China and

South Korea the royalty is about 2%.

The two sides are also believed to have discussed the spectrum policy of the government, which according to them, is loaded in favour of the GSM technology. Tata has already written about the issue to the department of telecommunications (DoT) and the Prime Minister's Office (PMO).

The two sides are also believed to have discussed the scenario if Reliance Communications switches over to GSM technology.