With the recent Supreme Court ruling regarding mobile phone service providers' licenses being revoked, aside from their own personal financial downfall in this case, some have it still worse than others. For example, Unitech, an Indian real estate company, who is tied to Norway’s major telecom provider, Telenor, and has been providing services in India under the brand name Uninor has just been slapped with a hefty $14 billion lawsuit.
Thanks to the cancellation of 22 of their licenses, Telenor felt that they “didn’t have a future” with their current tie up and has sought “indemnity and compensation” from their Indian counterparts. A previous release from the company claimed that at their Uninor end - leadership and the employees are still highly motivated to continue the fight for its operations in India. That has apparently come to a bit of an abrupt end, it seems. The same report also spoke of the Head of the Telenor Asia operations and Executive Vice President, Sigve Brekke together with representatives of Uninor employees, said that Telenor was a long-term telecom operator in India and that the Uninor spirit was even stronger than before. This release was issued on March 6, 2012.
Not looking good for Uninor
A little later on it, we also reported that Norway’s information technology minister, Rigmor Aasrud was in India to meet with Indian telecom minister, Kapil Sibal to discuss Telenor’s part in the proceedings. This meeting was to ensure that the Norwegian player was given ‘fair treatment’ in the SC ruling.
In addition to Telenor suing Unitech for a whopping $14 billion, they are also slated to be on the lookout for another partner to tie up with in India. Unitech is obviously not letting this slide and reports say that the company does not believe that they have breached any warranties as the Supreme Court ruling was a government policy and they can’t be held accountable. A Unitech nominee was also quoted as saying that - the court also has not concluded any wrong-doing on the part of the licensee companies.
Telenor is not backing down and the company is still holding string to the claims that Unitech is still liable for a breach of warranties related to the cancellation of the licenses. They are now seeking compensation for all their investment, guarantees and damages caused by the recent Supreme Court ruling regarding the licenses. For the indemnity part of the lawsuit, Telenor is claiming damages for the failure on Unitech’s part to obtain spectrum in the Delhi circle, which they considered to be a critical location.
Things are not looking good on the Indian side of the Telenor, Unitech JV, and chances are it might be a downhill run for the Indian service provider. Stay tuned for more information regarding the lawsuit.