Reliance Communications Chairman Anil Ambani has refused to accept the volume-based discount proposal that was pitched by the top brass of US-based Qualcomm, which has led to the failure of talks between the two companies.
Ambani, who had an eight-hour-long meeting with Qualcomm CEO Paul Jacobs, had sought a reduction in handset prices by reducing royalty levies.
"Ambani was open only to a handset price reduction as against the volume-led discount on cost elements, other than royalty, that was being offered by the CDMA technology licensor. He was not ready to settle for anything other than a reduction in handset prices," a source close to the development told Business Standard on Sunday.
Reliance Communications team had termed the volume discount structure opaque and not in the interests of consumers.
The Qualcomm team is believed to have made an offer to share marketing, advertising and promotional costs incurred by Reliance Communications and other CDMA service providers who promote its technology.
Market sources say 7 per cent royalty is being levied on CDMA handsets sold in the Indian market, while that in China and Korea was around 2 per cent and zero per cent in the US.
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