Will consider all options for future India investment: Telenor

Hit hard by a Supreme Court verdict cancelling the telecom licence of its Indian unit, Norway-based Telenor ASA has said it will consider all options before any future investment in the country.

Another foreign player Bahrain Telecommunications (Batelco) has already gone a step further and exited from the country, as it was getting “very uneasy” in India.

Russia-based conglomerate Sistema group, the third foreign player affected by the Supreme Court verdict cancelling a total of 122 mobile licences, has said it would file a review petition, while the fourth foreign entity, UAE-based Etisalat has been silent so far on the issue.

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All the four foreign players had significant holdings in different Indian telecom firms that had been allotted mobile licences in 2008, but the Supreme Court has cancelled these allotments while hearing the case related to 2G telecom scam.

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“We are working to protect our investments (in India) in all possible manners, and will consider every option prior to any further investments,” Telenor CEO Jon Fredrik Baksaas said yesterday, while announcing the company’s results.

On the same day, Bahrain-based Batelco announced the sale of its stake in Indian affiliate S-Tel, marking the first exit by a foreign operator since the court verdict.

STel said that Bahrain Telecom was “very uneasy” in India and therefore decided to sell its stake, while Telenor has also not ruled out an eventual exit and is currently looking to file a review petition.

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Batelco sold its 43 per cent stake in Indian affiliate S-Tel for USD 175 million – the same price for which it had acquired this stake in 2009.

“The telecom sector, particularly for the new operators, over the last two years has become like a badly-planned hurdle race,” an STel spokesperson said.

India’s Supreme Court last week ordered the cancellationof 122 telecom licenses, issued in 2008 during the regime of former communications and IT minister A Raja.

The revoked licences included 22 held by Uninor, a joint venture between Telenor and Unitech and six held by S-Tel. Other affected players include Sistema’s Indian venture with Shyam Telecom and another one between Etisalat and DB Realty.

The developments in India has also weighed on Telenor’s global quarterly earnings, as the company slipped into loss of 1.93 billion Norwegian kroner (USD 335 million) for the October-December quarter period on account of hefty impairment losses related to cancellation of 2G licences in India.

The foreign players have been saying that they have followed all the regulations with regard to their investments, but were taken aback by the ruling.

International magazine Time went on to say in a recent article that the Supreme Court verdict has ended nearly three years of uncertainty in the telecom scandal, while “opening up a new round of skepticism about India as a destination for foreign investment.”

PTI