After Norwegian telecom major Telenor recently threatened to quit India, the trade and industry minister of that country, Trond Giske, on Saturday said, if the telco was forced to close its India operations, its loss would be the biggest by a Norwegian company investing abroad.
“If this (Telenor’s) investment fails, it would be the biggest loss a Norwegian company has ever incurred in foreign investments,” Giske said while addressing a press conference in Delhi. Also present was Telenor CEO Jon Fredrik Baksaas, who has been a frequent visitor to India since 22 of the licences held by Uninor, his company’s joint venture with the Unitech group, were cancelled following a Supreme Court order.
Telenor has already invested $3 billion in India and has over 42 million subscribers through Uninor. It threatened to pull out of India recently in response to the stiff base price recommended by the Telecom Regulatory Authority of India (Trai) for the re-auction of 2G band spectrum, saying such a high price would make its business plans in the country unviable.
Giske, however, was quick to say that Telenor’s future in India would not impact his country’s relations with India, even as it would impact investments. “It is fair to say it will influence the view that India is a country to invest in. I think bilateral relations between India and Norway are very strong and can face the challenge. But, it may affect investors,” he said.
“We, as a minister promoting India as a country, would be met with the question that how would private investors be treated in this country if our own company was losing this kind of money,” he added.
Giske added he was hopeful that an amicable solution could be reached “if there is a political will”.
Baksaas reiterated his company might not have any option but to call it quits. “If the recommendation, as those stand, are accepted, it will be almost impossible for Telenor to continue in India,” he said.
Trai has recommended that the government start the re-auction with a base price of Rs 3,600 crore per MHz of 2G spectrum.
The Norwegian trade minister, who is responsible for his government’s ownership of Telenor, was here to meet the Indian authorities, besides Uninor employees.
Telenor has already written off its fixed and intangible assets to the tune of 8.1 billion krone (about Rs 7,415 crore) in India, in two tranches.
After the writedowns, as on 31 March 2012, Telenor had no further accounting exposure related to India.