Telenor to rope in new partner before auction

NEW DELHI, INDIA: Norwegian firm Telenor on Thursday said it is confident of roping in a new partner before the 2G spectrum auction takes place.

"If we have to go into the auction it will be with a new partner... we are in talks with a handful of local companies," Sigve Brekke, executive vice president and head of Telenor's Asia operations, told reporters here.

Brekke said the new partner may have 26 per cent share in the new entity, as Indian rules allow foreign companies to own a maximum of 74 per cent stake in a telecom venture.

"But as of now we haven't seen any formal communication from the telecom department... final decision is being made by the politicians and that is what we are waiting for now," he added.

Telenor operates in India under a joint venture, Uninor, with India's Unitech. The joint venture stands to lose all its licences following the Supreme Court's order cancelling 122 licences issued in 2008.

Following the cancellation of Uninor's licences, Telenor had said it planned to set up a new company. Both the firms had earlier moved the company law board (CLB) against each other to protect their individual interests.

While Telenor filed the petition to "prevent any wrongful obstruction" to its effort to secure its investments, Unitech filed one to prevent Telenor from assuming full control over the business.

Telenor has invested Rs.6,135 crore through equity and over Rs.8,000 crore in debt through corporate guarantees to build Uninor. It holds over 67 per cent stake in Uninor,

Brekke urged the government to ensure that the deferred payment of spectrum can take place as the firms were having difficulties in bank funding owing to insecurities in the sector.

Telenor has already hinted at its exit from the Indian market if the Telecom Regulatory Authority of India (TRAI) recommendations on the spectrum auction are accepted.

Speaking about its exit plans, Brekke said: "Even if India is an important market for us, we are not here to just plant our logo."

The regulator has recommended, among other proposals, a reserve price of Rs.3,622 crore for 1 MHz pan-India spectrum, which is around 10 times higher than the price at which 2G licences were allocated in 2008 under then Telecom Minister A. Raja.