The Norwegian government Tuesday put its weight behind Telenor ASA's (TEL.OS) efforts to avoid taking a massive hit on its India operations, saying that New Delhi must provide more predictability if it wants to draw foreign investors.

The comments come in the context of rising investor concerns after a recent court order cancelled 122 telecommunications licenses--effectively wiping out billions of investment dollars--and as the government moves to change tax rules with retrospective effect.

Norwegian Trade and Industry Minister Trond Giske, who is on a visit to New Delhi, Tuesday said he has taken up the Telenor issue with Indian Finance Minister Pranab Mukherjee.

Other Norwegian companies are looking for possibilities to invest in Indian sectors such as infrastructure and services, but they need predictability before putting in money, Giske told reporters.

The Norwegian government owns 53.97% of Telenor, which has already invested about $3 billion in its India operations.

The company is facing the risk of being stopped from providing services in the country after the Feb. 2 Supreme Court order cancelling all telecom licenses issued without auction since January 2008 to several operators including Unitech Wireless Ltd., Telenor's joint venture with Unitech Ltd. (507878.BY).

The order will come into effect on June 2.

The Supreme Court has also asked the Indian government to hold auctions to re-allot licenses and bandwidth. The government said it expects to take at least 400 days to complete the auctions, by which time the Norwegian company would have had to stop its operations in the country.

Giske backed Telenor's demand that the auctions be held by June, saying: "The Indian government has said they need more time for auctions. My point is that there has to be a parallel in withdrawing the licenses and conducting new auctions".

He said that companies cannot lose business because of a gap between the cancellation of licenses and fresh auctions.

Jon Fredrik Baksaas, president and chief executive of Telenor, reiterated that the timing and the format of the auctions--whether it's restricted to only those losing licenses or open to all--will be key for the company to take a decision on whether it wants to continue in India.

Telenor entered India by acquiring a 67.3% stake in Unitech Wireless from Unitech in 2008 for about INR61 billion ($1.25 billion). It is among the largest foreign investors in India's telecom sector.

Telenor has already threatened to seek damages and compensation for its investments from the Indian government if the license issue isn't resolved.

Giske said he didn't discuss the issue of damages with Mukherjee.

--By Prasanta Sahu and Romit Guha, Dow Jones Newswires; +91-43563309; prasanta.sahu@dowjones.com

Grafico Azioni Telenor ASA (QX) (USOTC:TELNY)
Storico
Da Giu 2024 a Lug 2024 Clicca qui per i Grafici di Telenor ASA (QX)
Grafico Azioni Telenor ASA (QX) (USOTC:TELNY)
Storico
Da Lug 2023 a Lug 2024 Clicca qui per i Grafici di Telenor ASA (QX)