Telenor warns of potential India exit

28 Apr 2016

Norwegian-owned cellco Telenor has repeated warnings that it may exit the Indian market after reporting an operating loss of NOK3.1 billion (USD379.95 million) for the division in Q1 2016, more than three times its operating loss of NOK990 million for the whole of 2015. The massive shift was due primarily to a NOK2.9 billion write-down and impairment during the quarter, including NOK1.4 billion related to network equipment and NOK900 million related to spectrum. Nevertheless, the Economic Times quotes Telenor CEO Sigve Brekke as saying that the group’s ‘long term presence in India is dependent on our ability to secure additional spectrum’ adding that: ‘We are not able to compete with [the] current spectrum we have in [a] growing data market.’ The official went on to say that Telenor was looking into securing spectrum at a price it can justify, including through spectrum auctions, and sharing/trading deals. Mr Brekke clarified the company’s position, however, saying: ‘We are in India to make money, if we don’t see return then we need to look at other alternatives.’

As noted by TeleGeography’s GlobalComms Database, Telenor changed tack to focus on profitability following the cancellation of its pan-India concessions in 2012, limiting its footprint to six circles (the company holds frequencies in a seventh but has yet to launch there). This caution saw the cellco steer clear of the recent spectrum auctions, leaving it without the necessary airwaves to introduce traditional 3G or 4G services, although the cellco has developed a solution that will allow it to introduce LTE services over a 1.4MHz block of 1800MHz spectrum.

India, Telenor India