OnQ Blog

Repatriation: A Win for the US Economy

Jul 14, 2011

Qualcomm products mentioned within this post are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

The latest round of gloomy economic numbers should add greater urgency to bipartisan efforts to pass repatriation legislation. American businesses have an estimated $1 trillion sitting offshore, and many in Congress would like to bring that cash home with a lower tax rate as an incentive.

While many more Democrats have boarded the repatriation train, some critics are clinging to misguided arguments that repatriation legislation – which would subject offshore profits to a temporary tax rate of 5.25% as opposed to the current 35% - would somehow result in a loss to American taxpayers. My response? 5.25% of a trillion dollars is a lot better than 35% of nothing.

Repatriation has to be viewed in the context of profound changes that have altered the competitive landscape for global multinational companies such as Qualcomm. Decades ago American firms had to repatriate their cash, whatever the tax rate, because there weren’t as many good investments outside our borders. Companies brought their cash back to build production and distribution infrastructure to serve the most important market segment of all – America.

Today that’s no longer the case. Companies such as ours make an increasing percentage of their overall profits outside the US. Consider for a moment Qualcomm’s industry – wireless technology. The U.S. is a vibrant marketplace for 3G smart phones, tablets and connected laptops, and it’s forecast to grow by 20% from 2010-2015.

Compare that to India, where we recently invested hundreds of millions of dollars in a new broadband wireless venture. The Indian 3G wireless opportunity is forecast to grow by 233% between now and 2015. The number of 3G subscribers in China will grow by 396% during the same period. Latin America? 417%, led by the red-hot demand for mobile wireless in Brazil.

Now these countries, to be fair, are starting from smaller bases. But even with that caveat, it should be clear to policy makers that firms such as Qualcomm have ample opportunities to grow their businesses outside the US. This isn’t bad news at all, of course – international opportunities will result in American job creation, as we add to our engineering and development teams in San Diego, Texas, North Carolina, Colorado and other US locations. Qualcomm is and always will be a company that grows at home when it succeeds abroad.

The point is that repatriation is no longer an imperative for corporations such as ours. Without a dramatically reduced tax rate, such as the 5.25% rate specified in HR 1834, repatriation simply will not happen. Much of the nearly $1 trillion held by American companies will sit offshore, or be invested in foreign ventures. How is that scenario a win for American taxpayers?

William Bold

Senior Vice President, Government Affairs, Qualcomm Incorporated

More articles from this author

About this author

Related News

OnQ

Proof that mobile tech is helping patients manage their diabetes

Recently, we gathered in Mexico City to announce the final results of the Qualcomm Wireless Reach-supported Dulce Wireless Tijuana (DWT) mobile health study in Tijuana, Mexico that were also published in the Diabetes Technology & Therapeutics journal.

Distinguished speakers at the event included Salvador Blasco, vice president of Business Development and Mexico Country Manager for Qualcomm; Gabriela Manriquez, senior director of Government Affairs for Qualcomm; Dr. Maria Cecilia Anzaldo from the Mexican Institute of Social Security’s (IMSS); and Dr. Adriana Carolina Vargas from the School of Medicine and Psychology of the Autonomous University of Baja California (UABC) — two well-known public institutions in Mexico.

Non-communicable diseases, such as diabetes, are the leading cause of death worldwide. The problem is particularly acute in Mexico which has the highest percentage of people between the ages of 20 and 79 with diabetes. The International Diabetes Federation estimates that type 2 diabetes will affect nearly 20 percent of Mexico’s adult population by 2035 and will account for 23 percent of the IMSS budget by 2030.

Clearly, innovative interventions are needed.

Oct 19, 2016

OnQ

How mobile technology is improving heart health in China

In 2011, Qualcomm Wireless Reach launched the Wireless Heart Health (WHH) program in collaboration with Life Care Networks, a Beijing-based company dedicated to bringing advanced technologies and products to remote areas in China.

After four years of business and technology development, WHH has served more than 600 community health centers and clinics across 21 provinces in China. More than 160,000 patients have benefitted from the program, some of whom are managing chronic cardiovascular diseases (CVD), and some of whom were screened for the first time. Many of these patients are rural and don’t have access to high-quality medical care.

In celebration of World Heart Day, we are happy to announce a new white paper summarizing WHH program results that highlight the program’s success supporting rural health providers to address the rising health burden of CVD.

China has a population of about 1.4 billion people. Over 40% of Chinese people live in rural areas, and the imbalanced allocation of health resources between rural and urban regions has become the subject of serious public concern. In some remote and underdeveloped areas, the private clinic is an important supplement to public hospitals. These clinics usually have a severe shortage of health professionals and medical resources. It’s quite common that there are only one or two general practitioners working at each clinic, serving thousands of residents from nearby counties and villages.

Lang Mao Shan, a clinic my colleague, Lauren Reed, and I visited last fall, is one of these private rural clinics. Two full-time providers serve 80,000 community residents living on the outskirts of Jinan City, delivering health services to an average of 350 patients per day in a small and crude clinic.

Sep 30, 2016

OnQ

Acceleration of the 5G NR global standard gains industry momentum

We continue to move closer to a global standard for 5G New Radio (NR), and it may actually be closer than you think. 5G NR is the ongoing 3GPP study item that defines a new OFDM-based wireless radio standard, which will become the foundation for the next generation of mobile networks. 5G NR and the possible acceleration of the standard were key topics at the 3GPP RAN Plenary Meeting held last week in New Orleans, Louisiana.

A proposal (RP-161915) was endorsed at the meeting stating “The existence of strong industry interest to accelerate 5G NR Non-Standalone (LTE-anchored) to December 2017 or March 2018,” from the currently planned specification-completion date of June 2018. 5G NR Non-Standalone operation will utilize an LTE anchor (LTE EPC) for mobility management, bringing new levels of capability and efficiency with the 5G NR air interface, while leveraging the existing LTE core network. The proposal also emphasized interest in not delaying finalization of the 5G NR Standalone and the new 5G NextGen core network specifications beyond the currently planned date of June 2018.

The eventual acceleration of the 5G NR Non-Standalone specification will help accelerate both trials and deployments of the 3GPP-based 5G NR global standard. Lab integration will begin in late 2017 leading to over-the-air trials in early 2018 with the intent to drive the mobile ecosystem toward rapid commercialization of 5G NR technologies at scale starting 2019. This acceleration of 5G NR will bring new capabilities to mobile networks to enhance mobile broadband with multi-gigabit-per-second data rates, significantly lower latencies, and lower cost-per-bit. New 5G NR technologies will be critical to meeting the increasing connectivity requirements for emerging consumer experiences such as streaming 360-degree video in virtual reality, augmented reality, higher FPS video communication and always-on cloud services. Addressing these requirements while tracking the 3GPP specification is important because it ensures adherence and validation with the first 3GPP 5G NR specification that will be part of 3GPP Release 15. It will also ensure forward compatibility to future 3GPP 5G NR releases.

Sep 27, 2016
OnQ

A new kind of spectrum for new opportunities

Last year, the FCC opened up 150 MHz of spectrum in the U.S. around 3.5 GHz that it named Citizens Broadband Radio Service (CBRS), not to be confused with the old CB radio. Hidden under that name is a novel approach of making more spectrum available when and where it can be used. As spectrum is the life blood of wireless communication, the FCC’s move has the potential to create new wireless opportunities, which for consumers means new and better services.

So what is the new approach in CBRS? First, it enables others to use the spectrum while it is still being used by existing incumbents, such as the military or satellite communication, see Figure 1. This in itself is not new. As a matter of fact, we helped to introduce this concept back in 2013 with Licensed Shared Access (LSA), where a license holder exclusively shares the spectrum with the incumbent. This is a powerful concept that unlocks more spectrum for wireless communication.

Aug 29, 2016
OnQ

Qualcomm builds momentum in China with Oppo licensing agreement

When it comes to how we connect, Qualcomm is committed to bringing the future forward faster, particularly through wireless connectivity. On the heels of recent agreements with Chinese electronic giants like Lenovo, Xiaomi and Haier, we are pleased to have reached a new patent licensing agreement with Oppo.

The agreement enables Oppo to develop and manufacture mobile devices with 3G and 4G LTE capabilities in China. Currently, more than 100 Chinese companies have signed license agreements with Qualcomm that are consistent with terms of the rectification plan submitted by Qualcomm to, and accepted by the NDRC.

The new agreement provides another step forward for Qualcomm to expand its licensing business in China—and to continue developing the connectivity fabric of everything on a global scale.

“Qualcomm is very pleased to sign a license agreement with OPPO,” said Alex Rogers, senior vice president and general manager, Qualcomm Technology Licensing. “As an R&D engine for the industry, we are excited to see companies such as OPPO build on our patented technologies to drive further development and innovation and create compelling products."

According to IDC (July 2016), Oppo is the 2nd largest manufacturer of mobile electronic devices in China for the first half of 2016 and a top-10 global electronics player.

Aug 1, 2016