New Delhi: The Norway-based telecommunication major Telenor ASA Monday said it may wind up its India operations if the Telecom Regulatory Authority of India's (TRAI) recommendations on the second generation (2G) mobile telephony radio spectrum auction at higher-than-exacted reserve price are accepted.
"If these recommendations become policy, then the Government of India will be forcing Telenor Group to exit," Telenor said, a day before the meet of Empowered Group of Ministers (EgoM) to decide on the recommendations proposed by the telecom regulator.
Telenor operates its telecom business in India through Unitech Wireless Ltd, a JV the Norwegian firm established with the Indian real estate major Unitech Ltd. Unitech Wireless offers its services under the brand name Uninor.
Last week, the telecom regulator proposed near 10-fold rise in base price for auction of second generation (2G) mobile telephony radio spectrum and suggested the government open the auction to all companies.
The scenario for auctioning of airwaves was created after the Supreme Court earlier February canceled all 122 telecom licenses, including 22 of Uninor, awarded to eight operators to offer second generation mobile telephony services in a scandal-tainted spectrum sale in 2008.
The regulator suggested an auction base price of Rs 36.22 billion for every megahertz (MHz) of nationwide spectrum in the 1,800 MHz band, against a price of about Rs 3.8 billion in the 2008 sale.
The apex court has directed the government to conduct fresh auctions for spectrum by August 31.
Meanwhile, the Norwegian firm said in a statement that it has written down the remaining fixed and intangible assets in the Asia's third largest economy, amounting to 3.9 billion Norwegian crowns (about Rs 36 billion).
"Telenor ASA has decided to write down the remaining fixed and intangible assets in India amounting to NOK 3.9 billion (NOK 2.6 billion after non-controlling interests)," it said.
Following the write down, which will be included in the company's first quarter 2012 results to be announced on May 8, 2012, Telenor will no longer have accounting exposure related to India.
A write down is a downward revision in the value of an asset in the balance sheet of a company.
Telenor entered India in 2009 after forming a JV with Unitech, which had acquired licenses to offer 2G (second generation) mobile telephony services in 2008 through Unitech Wireless. The Norwegian company has made an investment of over Rs 145 billion in India so far.
Telenor Executive Vice-President and Asia head Sigve Brekke had said recently that Telenor has no plans to take part in the 4G (fourth generation) and even 3G (third generation) spectrum auctions and it will focus on voice.
Telenor holds 67.25% stake in Unitech Wireless, while the remainder is with the Indian real estate major.
Copyright Contify.com
