Telenor earmarks Rs 15,500 cr investment in India
Oslo/New Delhi: Norwegian telecom major Telenor has committed an investment of Rs 15,500 crore to its Indian operations and may bid for 2G spectrum for the Mumbai circle in the proposed auction.
The company in a presentation said that it is "committed to INR 155 billion (Rs 15,500 crore) peak funding", but did not give any timeframe for this funding. The company said it expects to reach operating break even by the end of 2013.
Telenor has set up a separate company Telewings Communications in joint venture with Lakshdeep Investment to run its Indian operations after severing its ties with Unitech. Telenor, at present, holds majority stake in telecom operator Uninor whose licences are valid till January 18, 2013, as per the Supreme Court order.
Post January, the assets and business of Uninor will be transferred to Telewings, in which Telenor would have 74 percent stake.
Telenor, which won spectrum in six circles in the 2G auction last month, said it will look at participating in 2G auction that is to be held before March 2013.
"There is most likely a new auction coming in the first quarter of next year. We will of course be looking at that, at least for one of our circle Mumbai where we currently have our operations," Uninor Managing Director Sigve Brekke said.
Government on Thursday announced to reduce minimum price of spectrum in four telecom service area- Delhi, Mumbai, Rajasthan and Karnataka by 30 percent. As per this decision, price of spectrum in Mumbai for circle for 1800 Mhz band will be Rs 474.91 crore per block compared to Rs 678.45 crore.
As per the rule of last auction, new companies or companies whose licences were cancelled by Supreme Court had to buy at least 4 blocks to operate in a telecom service area.
Telenor, if its bids for Mumbai circle, will have to pay at least Rs 1,899.68 crore.
Telenor group executive CEO Jon Fredrik Baksaas said the company is in the process of seeking regulatory approvals to raise its stake in Telewings Communications from 49 percent, at present, to 74 percent.
He said that participation in 2G spectrum auction will be funded from the committed Rs 15,500 crore investment.
"The Rs 155 billion is for overall framework (of investment) that includes potential participation in auction in 2013."
Brekke said that the company aims to achieve 25 percent return on new investment and see huge potential in the six circles where it will continue to operate.
"We have already turn EBIDTA positive in UP East. Probably, in early 2013 we expect Maharashtra and Gujarat to be doing the same," Brekke said.