Telenor looking at spectrum trading and mergers

As India's telecom market consolidates and the next wave of growth shifts to data traffic, smaller players like Telenor India are looking at options like spectrum trading and mergers.

The company offers services in six circles and holds liberalised 1800 MHz spectrum that can be used to deploy any technology.

According to people in the know, Telenor is looking to increase its spectrum holdings through sharing. It is also in talks with state-run BSNL for an intra-circle roaming pact.

An exit option will be the last resort for a company that has invested $3 billion in India. When asked whether Telenor planned to exit India, a company spokesperson said, "We cannot comment on speculation."

In its fourth-quarter results presentation, Telenor Group Chief Executive Officer Sigve Brekke said, "The future of our Indian operation will depend on additional spectrum. There is an auction coming up and we look at that as an opportunity. If we cannot justify a return on spectrum prices, we will have to consider all other alternatives."

The government plans to conduct another round of spectrum auction in July-August. Operators, including Telenor, have expressed concern over the high reserve price for the 700 MHz band, which is considered good for 4G services.

Telenor is looking to launch 4G services within six months. Depending on the response to a pilot project in Varanasi launched recently, the company could launch 4G services in eight cities.

The 4G testing is being done in the 1.4 MHz band with a new technology called narrow band LTE. This is a short-term solution and the company will need more spectrum to deliver data services to its 52 million users.

Telenor India CEO Sharad Mehrotra had said in an interview to Business Standard in March the company was evaluating options to increase its presence in the mass market segment.

Telenor has positioned itself as a mass market player in the six circles it offers services in. It also holds a licence in Assam but is yet to launch services there.

Last October, it signed a deal with Huawei to make its network future ready. It is also the only telecom operator to offer compensation for dropped calls.
IN A NUTSHELL

• Telenor operates in 6 circles, subscriber base at 52 million
   
• Holds 1800-MHz liberalised spectrum in 6 circles
   
• Exploring spectrum trading, sharing and M&A route
   
• Waiting for govt to finalise reserve price of spectrum for next round of auction to happen this year