Indian mobile market leader Bharti Airtel has signed a definitive agreement to take full ownership of Norwegian group Telenor’s Indian subsidiary. Under the deal, Bharti will acquire all of Telenor India’s spectrum, licences and infrastructure as well as its employees and customer base of 54.47 million (as at end-December 2016). Airtel will also take over Telenor’s outstanding spectrum payments and other operational contracts, including tower lease. In a press release from the firm, Telenor noted that the transaction would not trigger any impairment, with the remaining value of the company’s tangible and intangible assets totalling NOK300 million (USD35.86 million). The transaction is subject to regulatory approvals and is expected to close within twelve months.
Commenting on the deal, Telenor Group CEO Sigve Brekke explained: ‘Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis would not have given an acceptable level of return.’
As noted by TeleGeography’s GlobalComms Database, Telenor took a cautious approach to its Indian division in the wake of the 2012 mass licence cancellation, repurchasing concessions in just six areas (it later bought spectrum in a seventh circle, but never launched services there). Its strategy of minimising spending and focusing on the mass market and areas that had been neglected by its rivals proved effective for a time, but the sudden rise in popularity of data services caught the cellco off guard. Lacking the necessary spectrum to offer fully-fledged 3G or 4G services and unwilling to pay the rapidly rising prices for the necessary airwaves, in April 2016 Mr Brekke suggested that Telenor would likely look to exit the market: ‘[Telenor’s] long term presence in India is dependent on our ability to secure additional spectrum … We are not able to compete with [the] current spectrum we have in [a] growing data market.’