Qualcomm Invests $300 Million In NextWaveQualcomm Invests $300 Million In NextWave

Telecommunications equipment maker Qualcomm Inc. is investing $300 million in NextWave Telecom Inc., a cash-strapped vendor of high-speed wireless communication and multimedia services.

The Qualcomm investment is contingent upon NextWave's completion of a reorganization plan it filed last week. The plan, filed with the U.S. Bankruptcy Court for the Southern District of New York, includes paying off creditors and reinstating its wireless spectrum licenses. The FCC had threatened to revoke the licenses and re-auction them if NextWave didn't make remaining payments of more than $4 billion.

Qualcomm, no stranger to investing in small companies, is taking a chance on NextWave to "drive and promote the growth of third-generation CDMA in wireless products and the Internet," says a company spokeswoman. This marks Qualcomm's second investment in NextWave; the first was in 1995.

Analysts have concluded that the promise of high-speed 3G wireless services is worthwhile, but still a long way off. Some say 3G won't make it into mainstream use until 2006. The telecom vendors, however, are confident that their wireless networks and devices will be ready to capitalize on the promise.