Telenor not to quit India


12 Jan 2012
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Telenor not to quit India

Norway's Telenor on Thursday hinted it had dropped plans to exit India and would participate in the upcoming spectrum auctions with a new partner after scrapping its existing joint venture with real-estate developer Unitech Ltd.

Last month, Telenor had warned that it would exit India if the government accepted the telecom regulator's proposals to auction airwaves at 13 times the price used in 2008 and impose strict rollout obligations. The Scandinavian telecom major had also objected to Trai's recommendations to auction a mere 5 MHz of airwaves in the 1,800 MHz band in which Telenor operates, a quantum of airwaves sufficient for only one company to operate, though nine companies have lost licences after the court decision.

"We understand that the Telecom Commission (the highest decision-making body of the telecom ministry) wants to put up all available 2G spectrum for sale. We are happy they have opposed the stringent rollout obligations specified by Trai. The commission has also not approved the reserve price proposed by Trai, and this is positive for us because there may be some considerations in the government to reduce the minimum price," Telenor Executive Vice-President & Asia head Sigve Brekke said in a telephonic interaction with ET.

Telenor's India operations were among the worst affected by the Supreme Court's February 2 order quashing licences awarded in the controversial 2008 sale by former telecom minister A Raja. The court asked the government to issue new permits through an auction.

Following the apex court orders, Telenor served a divorce notice and sought compensation from Unitech for damages caused to their mobile venture. Telenor had also announced that it was forming a new company in India and would shift its existing business, including 4.5-crore customers and 17,500 employees, to this entity. Brekke said that Telenor was in discussions with 'several potential partners' for a possible JV here as it cannot hold more then 74% stake in its India arm under the country's foreign investment laws.

He declined to name the companies Telenor has approached, but added that the new partner would have to meet three conditions - have a 26% minority stake in the JV, give complete operational control to Telenor to run the company, as well as share its views on the prospects of investing in India.

Brekke urged the government to allow companies make staggered payments for airwaves as recommended by Trai. Last week, the commission had rejected Trai's proposal to allow companies stagger their payments for spectrum bagged through the bidding process.

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