Telecom Vendors

Spike in revenue for Qualcomm as India launches 4G

As India prepares itself for the transition to 4G, Qualcomm has observed a 23% increase of revenue due to a demand surge for phones.

The American chipmaker powers more than half of all smartphones sold in India and posted sales of Rs 5,426 crore locking in a net profit of Rs 518 crore in FY18, financials sourced from research platform Tofler. The company’s growth slowed down from a year ago when it grew 39%, but has nearly doubled sales and profit over the past three years.

“There are two aspects that have stood out for India; one, this is a growing market for smartphones and two, the telecom carriers have also rapidly adopted 4G, which has transitioned this market totally from 3G to 4G and now is moving the 2G to 4G,” said Rajen Vagadia, country manager of Qualcomm India.

The telecom industry in the world’s second-most-populous nation is transiting rapidly to 4G data technology after the entry of RelianceNSE -0.39 % Jio. The Indian mobile network operator started services in September 2016, and helped spur data consumption in the country with its 4G-only network, meaning rivals Airtel and Vodafone were forced to slash its tariffs.

India mobile phone shipment crossed 300 million units for the first time ever with smartphones capturing almost 44% of the total volumes in CY 2017.

San Diego-based Qualcomm said it has evolved over the last few years supporting end-to-end product engineering, contributing to technology innovation in areas such as 4G, IoT and now 5G. 

“This transition has been fuelled by solutions that Qualcomm provided, including the explosive growth of the Jio 4G feature phone at one end of the spectrum while our partners like Xiaomi have brought premium tier Snapdragon 845 at affordable prices,” Vagadia added. 

Qualcomm’s Indian revenue doesn’t account sale of all its products in India however. A bulk of its transactions are with global suppliers in the US and China, which in turn market them in the country.

Shobhit Srivastava, research analyst, Mobile Devices and Ecosystems, Counterpoint Research says that most of the smartphones featuring Qualcomm’s Snapdragon chipset are in the mid and high tier segment, which explains the company’s billion dollar sales value in India.

”Qualcomm India can further grow its revenues given the OEMs (original equipment manufacturer) and ODMs in India start sourcing products directly with the advancing manufacturing and designing ecosystem in India,” he said in an interview to The Economic Times.

Qualcomm has helped bring features such as voice calls over a 4G LTE network and voice over Wi-Fi for consumers in India, by working closely with Indian cell carriers. The chipmaker said most companies were looking to launch major global technologies concurrently in India, making the country the first or second market for such rollouts.