Norwegian telco Telenor has decided to write down its remaining fixed and intangible assets in India amounting to NKr3.9bn (US$680m) as a “precautionary measure”.
Telenor’s overall write-down following the Indian Supreme Court’s 2G ruling has…
Norwegian telco Telenor has decided to write down its remaining fixed and intangible assets in India amounting to NKr3.9bn (US$680m) as a “precautionary measure”.
Telenor’s overall write-down following the Indian Supreme Court’s 2G ruling has therefore reached about NKr 8.1bn (US$1.4bn).
The company said if recommendations made by India’s regulator are accepted by the Department of Telecommunications (DoT), “it will be almost impossible to participate in the auction for Telenor.”
In late April, the Telecom Regulatory Authority of India’s (Trai) recommended that the reserve price for 5MHz of 700MHz band should be set at Rs72.44bn (US$1.37bn), at Rs36.22bn (US$685m) for 5MHz of 800/900MHz band, and at 18.11bn (US$343m) for 5MHz of 1800Mhz band.
The recommendations have been criticised by several telco players, including Telenor which said that “these recommendations will create severe negative impact on the entire telecom industry in India. It is up to the political leadership of India to now ensure that the gains of the past few years of affordable phone calls for India’s people are not undone.”
Rendering its verdict on the country’s 2G scam, the Supreme Court had announced in early February that 122 2G licences would be revoked. This decision particularly affected the Indian mobile JV of Telenor, Uninor, which is set to lose 21 licences.
A new 2G auction is now expected to take place before 31 August 2012. But several telcos have already announced intentions to shut down their respective operations in the country.
Sigve Brekke, head of Telenor’s Asian operations, was quoted telling Bloomberg that acceptance of the regulator’s plan by the government would force Telenor to exit India.
Today’s announcement comes three months after Telenor said it would write down NKr4.2bn (US$720m) related to licences and goodwill in India. After this new write-down, which will be included in Telenor’s results for Q1 2012, the company has no further exposure related to India as of 31 March 2012, it said.
