Norwegian-backed cellco Telenor India has confirmed that it will not participate in the upcoming spectrum auction, suggesting the operator may soon look to wind up operations. In its Q2 2016 report, parent company Telenor Group revealed that it would not be taking part in the tender, as ‘the proposed spectrum prices do not give an acceptable level of return,’ adding: ‘We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on CAPEX.’ Telenor warned earlier this year that its long term presence in India was dependent on its ability to secure additional spectrum at an acceptable price. Having ruled out the possibility of acquiring spectrum at auction, Telenor will either have to purchase spectrum from another provider, or agree a spectrum sharing pact if it intends continue to operate in the long term.
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 just six of India’s 22 operating areas (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 and focus on providing basic services to the mass market. The strategy proved successful, but Telenor now lacks the necessary airwaves to introduce 3G or 4G services to meet the rapidly increasing demand for data services. As a stop gap solution, Telenor has developed a narrowband LTE platform that will allow it to introduce 4G services over a 1.4MHz block of 1800MHz spectrum, although this variant provides much slower transfer rates than 4G networks using 5MHz or more.