Norway's Telenor has set a target of achieving breaking even by the end of 2013 in the six circles where it recently won spectrum.
The company announced that its Indian operations in Uttar Pradesh East has become its first circle to achieve break-even. This means the company’s operations in UP East are now profitable, with revenues being higher than operating costs (EBITDA break-even).
This is the fastest break-even by any mobile operator in any circle in India, and the milestone has been achieved ahead of the stated target of break-even in the calendar year 2013.
“This is the latest in several major achievements, and of course, among the most crucial of all. This is an achievement that starts the countdown towards a profitable Uninor,” said Jon-Fredrik Baksaas, President and CEO of the Telenor Group.
In the six circles where fresh spectrum has been secured, Uninor serves over 30 million subscribers. At the time of achieving break-even, Uninor in UP East serves over 7.2 million customers. Uninor incurs a cost of 18 paisa per minute, the lowest among all operators in the circle. Its spectrum usage efficiency is 40 per cent higher than all others.
“What makes this remarkable yet is that we are now profitable while offering highly competitive tariffs and managed to keep a strong market focus while operating in an extremely challenging business and regulatory environment over the past year. I credit this achievement to the choice our customers, employees and business partners are making every day,” said Sigve Brekke, MD of Uninor and Head of Telenor Asia.
Telenor Group has secured 5 MHz spectrum UP East, UP West, Bihar, Andhra Pradesh, Gujarat and Maharashtra in the recently concluded auctions. This allows Uninor operations to continue seamlessly in the new company for 20 years. Together, these six circles account for over 50 per cent of India’s population and with a real penetration as low as 40 per cent, Telenor Group expects its remaining circles to begin achieving the break-even targets in the months to come.
Baksaas said that the company will focus its resources on its total investment goal of Rs 15,500 crore on the six circles.
