Norway’s Telenor takes $368 mn write-down on India operations….writes Asian Lite News
Norwegian telecom giant Telenor has cut the valuation of its India operations by nearly $375 million and said its operations in the country were under pressure, even as it looks forward to acquiring spectrum in the upcoming auctions at reasonable rates.
“As communicated before, long term presence in India is dependent on our ability to secure additional spectrum.
“With the current portfolio of spectrum we have not been able to compete in the growing data market,” said Telenor global chief executive Sigve Brekke while announcing financial results (January-March quarter) of the company in Norway.
He said India had a good quarter and added 1.5 million new subscribers, which took up its subscriber base in the country to 44 million in total. It was a 15 percent subscribers growth year-on-year.
“Also despite pressure on data now replacing voice revenues we were able to grow revenue at 7 percent. However, the operation is under pressure. So the average revenue per unit is down 8 percent,” he added.
Owing to a write-off and impairment, the company also cut the valuation of its India operations by 3 billion kroner or $368 million.
Talking about the upcoming telecom spectrum auction in India, Brekke said: “We are looking at the upcoming auction. That’s why we are looking at potential spectrum trading opportunities.”
Telecom companies in India are already unhappy over the high reserve price recommended by the Telecom Regulatory Authority of India for the upcoming auction being offered in as many as seven bands.
In the Delhi circle, TRAI has recommended Rs.1,595 crore for 700 MHz band, Rs.848 crore for 800 MHz, Rs.673 crore for 900 MHz, Rs.399 crore for 1,800 MHz, Rs.554 crore for 2,100 MHz, and Rs.143 crore for 2,300 MHz and 2,500 MHz.
Going by the recommended price the mop-up is expected to be as much as $83 billion or Rs.560,000 crore payable over the term of the contract – bigger than the $17 billion of the previous round.
Brekke said the revenue market share of the company is 6.5 percent in the six circles it operates.
The company has operations in Andhra Pradesh, Uttar Pradesh East and West, Bihar, Gujarat and Maharashtra.
“Overall 6.5 percent brings us to number 4 position in the six circles where we operate. The three big ones are way ahead but now we have a clear number 4 position.”