2nd UPDATE: Telenor Warns It May Have To Leave India Completely
30 Aprile 2012 - 11:12AM
Dow Jones News
Norwegian telecommunications operator Telenor ASA (TEL.OS)
Monday warned the Government of India would be forcing it to exit
the country completely, if it were to follow current
recommendations for the planned renewal of an auction for mobile
licences in the country.
In February, India's Supreme Court ordered a re-run of a mobile
license auction originally held in 2008, after concluding it was
rigged and underpriced. As a consequence, Telenor's majority-owned
Indian joint venture Unitech Wireless was ordered to return all 22
of its mobile licenses.
Earlier this month, India's telecommunications regulator
proposed that the government open the sale to all companies when it
auctions mobile-phone bandwidth. It also suggested a base auction
rate that is several times more than the price at which India
allotted 122 licenses and bandwidth to several companies in
2008.
On Monday, Telenor warned in a statement: "If the recommendation
from TRAI [Telecom Regulatory Authority of India] in its current
form should be approved by [India's] Department of
Telecommunications, it will be almost impossible to participate in
the auction for Telenor." It added that it is now "working
actively" to bring forward an acceptable solution.
In a separate statement, Telenor spokesman Glenn Mandelid said
that if the recommendations of the TRAI become policy, "then the
Government of India will be forcing Telenor to exit" the Indian
market as the renewed auction could be too costly for Telenor to
participate in.
Due to uncertainty regarding its future operations in India,
Telenor said it will make another write-down of its remaining fixed
and intangible assets in India, amounting to NOK3.9 billion ($0.68
billion), meaning it will no longer have any accounting exposure
related to its Indian operations.
Telenor has previously written down NOK4.2 billion in relation
to licenses and goodwill in India.
India's top court has set an Aug. 31 deadline for the government
to complete the renewed bandwidth auction, and allowed companies
affected by the judgment to operate until Sept. 7.
At 0813 GMT shares in Telenor traded 3% higher at NOK103,
against a 0.5% gain for the broader Oslo stock exchange.
Handelsbanken analyst Thomas Heath said investors are probably
relieved by Telenor repeating its conservative stance toward its
future in India. He added that it now seems increasingly likely
that Telenor will either leave India completely or continue its
Indian operations with a much reduced size.
-By Sven Grundberg, Dow Jones Newswires; +46-8-5451-3098;
sven.grundberg@dowjones.com
(Romit Guha in Mumbai contributed to this article.)
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