Qualcomm rejects calls to cut royalties

Qualcomm Inc. recently dismissed calls to cut royalties assessed to Indian CDMA-based wireless providers, saying its revenues would plummet.

"We don't make 7-percent royalty in India [as critics claim]. In general, [royalty rates] are below 5 percent," said Qualcomm CEO Paul Jacobs. Jacobs claimed the company has created competition, bringing down handset prices by 25 percent at the low-end. Hence, he said, calls for royalty cuts are unfounded.

Qualcomm maintains the key issue in the royalty debate is handset price because it directly affects operators and users alike. In driving down costs, suppliers can apply the savings to R&D that will further competition and reduce handset and service prices, according to a Press Trust of India report from New Delhi.

Indian CDMA providers and the Ministry of Communications counter that Qualcomm overcharges for royalties. Qualcomm reportedly offered to fund a government-operated R&D center out of its Indian revenues. The company is expected to propose the plan as an alternative to cutting royalties.

- K.C. Krishnadas
EE Times