Telenor to write-down $682 mn India exposure

Due to uncertain business environment in the telecom sector

Norwegian telecom company Telenor today said it will write down $682 million (Norwegian Krone 3.9 billion) to remove accounting exposure to India due to uncertain business environment in the sector.

The company said its decision follows spectrum auction recommendations by sectoral regulator Trai after the Supreme Court had cancelled 122 telecom licences, including 22 of the Norwegian firm, in the 2G spectrum case.

"As a precautionary measure, Telenor ASA has decided to write down the remaining fixed and intangible assets in India amounting to NOK 3.9 billion (NOK 2.6 billion after non- controlling interests)," Telenor informed Oslo Stock Exchange.

The write down will be included in Telenor's results for the first quarter 2012, to be presented on May 8, 2012, the statement said.

"After the write down, Telenor has no further accounting exposure related to India as of March 31, 2012." it added.

Telenor holds around 67% stake in joint venture Uninor, and rest of it is owned by realty firm Unitech.

The Supreme Court has asked the government to conduct fresh auction for the spectrum by August 31 and licences of the company will remain valid till September 7.

Telenor said Uninor's operational performance in India during the first quarter 2012 has developed according to plan.

"Following the Supreme Court's ruling in February to cancel Uninor’s licences and the recent recommendation from the Telecom Regulatory Authority of India (Trai) regarding the 2G licence re-auction, the uncertainty has increased significantly," Telenor statement to OSE said.

It further said, "If the recommendation from Trai in its current form should be approved by the Department of Telecommunications (DoT), it will be almost impossible to participate in the auction for Telenor."