(Updates to add CityBridge comment and clarification on Intersection ownership)

By Liana B. Baker and Paresh Dave

SAN FRANCISCO, Nov 1 (Reuters) - Chipmaker Qualcomm Inc and private equity firm JMC Capital Partners are looking to sell their stakes in a joint venture that operates more than 1,300 free WiFi kiosks fashioned from old phone booths around New York City, according to people familiar with the matter.

The move is the latest twist in the project overseen by Daniel Doctoroff, former chief executive of news and data provider Bloomberg LP and former deputy mayor of New York City. He now runs Sidewalk Labs, an urban development unit of Google parent Alphabet Inc. Doctoroff is chairman of a Sidewalk Labs subsidiary that is the top investor in the joint venture.

Qualcomm and JMC are working with an investment bank to explore the sale of their stakes in CityBridge, the venture that is behind the LinkNYC WiFi project, the people said, asking not to be identified because the matter is private.

Qualcomm is seeking to exit the venture because it views it as non-core, while the private equity firm JMC is aiming to generate a profitable return on its investment, the people said.

Qualcomm and Sidewalk Labs declined to comment. JMC did not immediately respond to a request for comment.

Jovana Rizzo, a spokesperson for CityBridge, said in a statement that the group is "committed to fulfilling its obligation to the city of New York and continuing the expansion of LinkNYC across the five boroughs."

A spokeswoman for New York City's Information Technology & Telecommunications Department said in a statement that the city would have to approve any changes and so far "nothing has been presented to us. Any decision we make has to center around continuing the success of the program and ensuring New Yorkers’ best interests are met.”

LinkNYC emerged in 2014 as part of a 12-year contract with New York City to replace 7,500 payphone stands and was expected to generate $500 million in revenue for the city's coffers.

The program's launch in February 2016 prompted complaints from business owners and residents about crowds hanging around the hotspots for hours at a time and users browsing online pornography on kiosk screens. LinkNYC removed the web-browsing feature.

More than 2.7 million people have registered to use the kiosks, which also have phone charging stations and free calling services, LinkNYC said Wednesday. LinkNYC kiosks generate revenue through ad sales.

Qualcomm and JMC each invested about $25 million into the joint venture in 2014, the sources said.