Wednesday, February 8, 2012

Telenor turns to Pakistan after hitting hard by India

Telenor is considering to invest more in Pakistan as the operator is thinking to exit Indian territory by May this year as a second option if government of India does not listen to the plea of Telenor. Indian Supreme court had cancelled all 122 licenses last week including 22 owned by Uninor, Indian Telecom joint venture of Telenor and Unitech Ltd declaring the entire licensing process of 2G as illegal and shady.
According to a Norwegian news site, soon after Indian court revoked the 2G licenses, Telenor Pakistan management contacted with people at Pakistan Telecommunication Authority (PTA) to discuss various options of investing more in Pakistan.
Sources at PTA has told that Telenor has finally realized the investor friendly policies in Pakistan and leniency on the part of regulator.
Telenor turns to Pakistan after hitting hard by IndiaIn Pakistan, cellular operator has faced loads of criticism from religious and social elements and more recently it’s services has caused the consumer right activists to pursue their complaints against Telenor court of law due to substandard services.
Norwegian site claims that Telenor is all ready to make PTA and government of Pakistan happy even it has to invest double the amount it has invested in Past.
Telenor’s decision to focus Pakistan depends upon the outcome of its appeal to the government of India where it has already invested two third of total planned investment of US $ 3 Bn.
According to Indian media, Supreme court has ordered to cancel all 122 2G licenses which will take effect after 4 months from now. In the mean time, Telenor is using all political and diplomatic means to safeguard its investment in India. It has already written down some US $ 722 Mn related to its Indian operation after the cancellation of licenses.
Supreme court has further ordered the telecom regulator in India to come up with new and viable rules and auction all the license again within 4 months so that Indian government could earn a fair price for each license.
If Indian telecom regulator re-conduct spectrum action, Telenor will have to spend more in addition to previously planned investment to claim new licenses or else it will have to wrap up and forget about the money it has invested so far.
Reuter quotes Telenor’s investors as saying that company should get out of Indian territory as soon as possible because Indian market is too difficult to operate freely.
Telenor entered India by acquiring  67.3% stake in Unitech Wireless which is an arm of real estate developer Unitech Ltd for US $ 1.24 Bn making it country’s second largest foreign investment in telecom sector after Vodafone Group PLC.
Many market players and analyst doubt Telenor’s wisdom of entering Indian cellular market and investing upfront US $ 1.24 Bn.
Norway’s Minister of Government Administration, Reform and Church Affairs Rigmor Aasrud, who also oversees telecom portfolio is currently visiting India to sort out the issue. Norwegian Prime Minster has already wrote a letter to Indian Prime Minister Manmohan Singh in this regard.
Norway’s government owns 53.97% of Telenor.

Recent Posts