Telenor to write down $682 m India exposure

Uninor Managing Director Sigve Brekke speaks during a press conference in Hyderabad, India, Saturday, April 21, 2012. Uninor said it is optimistic that a solution to the 2G spectrum issue would be found even as the company has initiated search for a new Indian partner for setting up a new entity, according to a news agency. Uninor lost 22 licences after India's top court canceled 122 licenses of various telecom operators granted to companies during an irregular sale of 2G cellphone spectrum that has been branded one of the largest scandals in the country's history. (AP Photo/Mahesh Kumar A.)

Norwegian telecom company Telenor on Monday said it will write down $682 million to remove accounting exposure to India due to uncertain business environment in the sector.

The company said its decision follows spectrum auction recommendations by telecom regulator TRAI after the Supreme Court had cancelled 122 telecom licences, including 22 of the Norwegian firm, in the 2G spectrum case.

“As a precautionary measure, Telenor ASA has decided to write down the remaining fixed and intangible assets in India amounting to NOK (Norwegian krone) 3.9 billion (NOK 2.6 billion after non-controlling interests),” Telenor informed Oslo Stock Exchange.

The write down will be included in Telenor’s results for the first quarter 2012, to be presented on May 8, 2012, the statement said.

“After the write down, Telenor has no further accounting exposure related to India as of March 31, 2012.” it added.

Telenor holds around 67 per cent stake in joint venture Uninor, and rest of it is owned by realty firm Unitech.

The Supreme Court has asked the government to conduct fresh auction for the spectrum by August 31 and licences of the company will remain valid till September 7.

Telenor said Uninor’s operational performance in India during the first quarter 2012 has developed according to plan.

“Following the Supreme Court’s ruling in February to cancel Uninor’s licences and the recent recommendation from the Telecom Regulatory Authority of India (TRAI) regarding the 2G licence re-auction, the uncertainty has increased significantly,” Telenor statement to OSE said.

It further said, “If the recommendation from Trai in its current form should be approved by the Department of Telecommunications (DoT), it will be almost impossible to participate in the auction for Telenor.”

Telenor said it is working actively with Indian authorities for an acceptable framework for continuing operations.

A similar statement was issued by Telenor Group Executive Vice President and Head of Telenor Asia operations Sigve Brekke in Delhi.

“If these recommendations become policy, then the Government of India will be forcing Telenor Group to exit,” Mr. Brekke said.

TRAI has recommended base price of Rs 3,622 crore for a megahertz of spectrum at pan-India level that is around 10 times higher than the price for 2G licences in 2008, when A Raja was the Telecom Minister.