India’s finance ministry has approved Norwegian telco Telenor’s application to take full control of its local mobile unit Uninor.
Confirming the approval in a release, the ministry said it was based on the recommendation of the Foreign Investment…
India’s finance ministry has approved Norwegian telco Telenor’s application to take full control of its local mobile unit Uninor.
Confirming the approval in a release, the ministry said it was based on the recommendation of the Foreign Investment Promotion Board (FIPB).
The ministry noted that Telenor will pay Rs780m (US$12.9m) to boost its stake to 100%. However, the Norwegian telco said in June that it would spend Rs7.8bn (US$130.6m) to do so. A spokesperson for the Oslo-based was today unable to confirm the price tag.
Telenor applied to boost its 74% stake in Uninor in June, taking advantage of a 2013 regulation change allowing foreign companies to own 100% of local telecoms assets, up from 74% previously.
Telenor will acquire the remaining 26% stake in Uninor from its local joint venture partner, Lakshdeep Investments.
The Telenor spokesperson said that, once formalities are in order, the company will take the necessary steps to complete the process of increasing its ownership of Uninor.
The spokesperson stressed Telenor’s long-term commitment to India, noting that its local unit has acquired spectrum in the 5 to 7.2 MHz range in seven of India’s 22 telecom service areas, which represent more than half of the national population.
In February’s spectrum auction, Uninor secured additional frequencies in the 1,800 MHz band in the seven areas for US$136m to improve its voice and data capacity.
Also this year, Uninor announced it would invest an additional Rs5bn (US$82.3m) to expand its network and distribution infrastructure by 30%, the spokesperson noted.
Telenor brought in Lakshdeep as its new partner for Uninor after ending its partnership with local real estate group Unitech following a bitter dispute last year.
Uninor is the eighth largest of India’s 13 mobile network operators with about 33 million subscribers.
UK-based Vodafone was the first operator to secure clearance from the FIPB to take full control of its local unit. US telco AT&T and Russia’s Sistema have also filed applications.
In August, India’s home ministry reportedly called for a return to the 74% cap on foreign investment in local telcos because of security concerns. According to an Economic Times report referencing a note from the ministry, it argued that foreign ownership regulations should be reviewed in light of last year’s leaks of classified information by former US National Security Agency contractor Edward Snowden about global surveillance programmes. At present, however, there is no cap on foreign ownership in telcos.
