Norway's Telenor could exit India if licence prices at an upcoming auction prove expensive, the head of the mobile phone operator's Asian operations said on Tuesday.
"It is conceivable that Telenor could pull out of India," Asia chief Sigve Brekke told reporters. "If we do not believe we can meet our profitability targets, we will exit."
Telenor's Indian subsidiary is among carriers whose permits are set to be offered again after the original auction was tainted by corruption.
A ministerial panel is expected to meet this week to flesh out conditions for the new August 31 auction, although it was not clear if that meeting would set the starting price, Brekke said.
He said Telenor expected full auction conditions to be made public in early August.
Telenor may have to find more than $3 billion for nationwide spectrum if regulatory proposals are accepted.
Its fast-growing Uninor subsidiary has 45 million Indian customers and is the sixth-largest provider, some two years after entering the rapidly expanding market.
"Our cash flow remains on track to break even in the first half of 2013," Brekke said.
Last month, Brekke said Telenor was confident of finding a new partner in India before the auction as it seeks to end its tie-up with Indian real estate company Unitech Ltd .
Telenor must have a local company as its partner because India caps foreign holdings in telecoms operators at 74 percent.
Brekke praised other parts of the new telecoms regime under construction, an overhaul which may result in the country ditching licences awarded specifically for second-generation (2G) and third-generation (3G) services.
"The liberalisation of mobile phone spectrum use that India is planning is visionary. They won't any longer be selling 2G or 3G spectrum and so on. It will be up to operators to decide what they use their capacity for," Brekke said.