Etisalat writes off $820 mn against India operations

After Telenor, UAE-based Etisalat, a shareholder in new telecom operator Etisalat DB, today said that it has written off $820 million worth value of its Indian operations by way of an impairment charge as an after effect of Supreme Court order cancelling 122 2G licences.

"Etisalat’s management has decided to recognise an impairment charge in its 2011 consolidated financial statements amounting to an aggregate of AED 3,044 million [about $820 million]...," the company said in a statement.

Etisalat owns about 45% stake in Etisalat DB, a joint venture between DB Realty and Etisalat of UAE.

The net impact of this charge on "our consolidated net profit after Federal Royalty amounts to AED 1,020 million (about $280 million)," it said.

Last week Norway-based Telenor, a majority shareholder in Uninor, had written off about $721 million worth value from its Indian operations.

The Supreme Court had revoked 122 UAS licences that were issued by the government of India in January 2008, Etisalat said, adding the ruling was against the process the Indian government adopted to issue licences and the pricing method adopted for awarding the spectrum.

The Supreme Court’s decision took the entire industry by surprise and significantly alters the competitive landscape in India’s telecommunications market, it said.