Telenor won't back down, in talks with Tata Tele for tie-up

Norwegian telecom service provider Telenor is going full steam ahead with its plan to set up a new joint venture in India, even as a resolution to its dispute with its partner Unitech is far from sight.

The company is reportedly in talks with Tata Teleservices for a strategic tie-up.

“The two companies are understood to have discussed various options, including merging Uninor’s assets with Tata Teleservices,” Business Line reported today.

Uninor is the joint venture between Unitech and Telenor, which is on the brink of a break-up after the company was allegedly involved in the 2G scam.

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The joint venture, however, has no licences as the Supreme Court has ordered cancellation of all licences under the controversial 2G spectrum auction.

India’s Company Law Board had in April allowed Unitech to refer the dispute with Telenor to International arbitration.

Unitech is opposing Telenor’s plan to pull out of the joint venture and transferring its business to a separate joint venture.

Another option for Telenor is to buy NTT DoCoMo’s stake in Tata Teleservices partially or fully, the report said.

NTT DoCoMo can increase or decrease its stake in Tata Teleservices by exercising its call or put options. There have been media reports suggesting the Japanese major may be looking at increasing its stake.

However, quoting sources, the BL report says Tata Teleservices has not been able to reach certain performance milestones set by the Japanese major. This may force NTT to sell its stake in Tata Teleservices.

Both the companies did not offer any comments on the development, the report said.

Scams and disputes apart, telecom sector in India will remain attractive for players looking for markets with good growth potential.