Qualcomm Incorporated (NASDAQ: QCOM) today announced that it has signed a binding Letter of Intent (LOI) with Chase Telecommunications, Inc. ("ChaseTel") of Houston, Texas and Nashville, Tennessee to supply approximately $140 million of Personal Communications Services (PCS) infrastructure equipment and services, based on Qualcomm's Code Division Multiple Access (CDMA) technology, and to make a $4 million equity investment in ChaseTel.
Under the terms of the agreement, Qualcomm will provide ChaseTel with its 1900 MHz QCMobility® base stations and base station controllers, turnkey deployment services, radio frequency design, training and network planning using Qualcomm's QEDesign® network planning software.
ChaseTel is a C Block license holder with 30 MHz PCS licenses in 11 Basic Trading Areas (BTAs) covering approximately 6.3 million people throughout Tennessee and parts of six surrounding states. The company has a strategic relationship with PrimeCo Personal Communications, L.P. (PrimeCo), one of the nation's largest PCS providers. PrimeCo is a partnership owned by AirTouch Communications, Inc., US WEST Media Group, Bell Atlantic Corporation and NYNEX Corporation. ChaseTel is a party to a series of agreements with PrimeCo which establish certain branding and service relationships between ChaseTel and PrimeCo. Under the terms of these agreements, ChaseTel will meet PrimeCo's strict standards of service, may market its services under the same brand names PrimeCo uses to market its services, and may offer its customers the ability to roam in PrimeCo's PCS network. PrimeCo will also become an equity holder in ChaseTel.
"This year we've seen CDMA become the leading North American digital technology with commercial deployments underway in the U.S. and Canada, as well as numerous other countries around the globe," said Thomas J. Bernard, president of Qualcomm's Wireless Infrastructure Products group. "With this agreement, ChaseTel will provide the highest-quality wireless service to its customers and offers seamless interoperability with PrimeCo's nationwide CDMA network. Qualcomm's QCMobility system provides a fully integrated, high-capacity, high- quality CDMA solution for ChaseTel."
ChaseTel plans to begin its deployment using Qualcomm's wireless infrastructure, with the goal of offering commercial service in the second quarter of 1998.
"There are tremendous business opportunities for wireless PCS providers and we plan to maintain a competitive edge by leveraging the core competencies of our partners," said Anthony Chase, chairman and president of ChaseTel. "By teaming with Qualcomm, we are gaining the CDMA technology, product and manufacturing expertise that will enable us to take a leadership position in launching the best possible service at the best possible price to our customers."
Compared with competing digital technologies, CDMA provides greater capacity, exceptional voice quality and enhanced privacy, while using less spectrum and power. Qualcomm's QCMobility system enables system operators to rapidly deploy their networks with larger coverage area, higher capacity and lower operating costs. In addition, QEDesign® network planning software ensures accurate and timely network design and implementation.
ChaseTel, a privately held corporation, intends to become a leading provider of broadband PCS in the State of Tennessee and surrounding areas. ChaseTel bid for and has been granted C Block licenses by the Federal Communications Commission to provide PCS service to the approximately 6.3 million POPs in its service area, including the Nashville, Memphis, Knoxville and Chattanooga metropolitan areas. ChaseTel's service area covers approximately 98% of the population of the State of Tennessee, and contiguous portions of six adjacent states. ChaseTel has its operational headquarters in Nashville, Tennessee, and its corporate headquarters in Houston, Texas.
Headquartered in San Diego, Qualcomm develops, manufactures, markets, licenses and operates advanced communications systems and products based on its proprietary digital wireless technologies. The Company's primary product areas are the OmniTRACS® system (a geostationary satellite-based, mobile communications system providing two-way data and position reporting services), CDMA wireless communications systems and products and, in conjunction with others, the development of the Globalstar® low-earth-orbit (LEO) satellite communications system. Other company products include the Eudora Pro® electronic mail software, ASIC products, and communications equipment and systems for government and commercial customers worldwide. For more information on Qualcomm products and technologies, please visit the Company's web site at http://www.qualcomm.com.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including timely product development and commercial implementation of the Company's CDMA technology, continued growth in the CDMA subscriber population and the scale up and operations of CDMA systems, timing and receipt of license fees and royalties, the Company's ability to successfully manufacture significant quantities of CDMA or other equipment on a timely and profitable basis and those related to performance guarantees, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 29, 1996 and most recent Form 10-Qs.
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