Telenor targets 2013 as its break-even year in India

At a time when every telecom service provider in India is reporting a net loss, Norway-based Telenor aims to turn operating and cash flow-positive in all the six circles where it has a licence by 2013, a year ahead of target.

“Our concentration and focus is clear. Six circles, basic services and break-even for 2013,” said John Fredrik Baksaas, president and chief executive officer of the Telenor Group. The company says it would decide on expansion once it turns cash-positive in all six circles — Gujarat, Bihar, Maharashtra, Uttar Pradesh (East), Uttar Pradesh (West) and Andhra Pradesh — where it had recently won back spectrum.

Telenor entered the Indian market in 2009, through a joint venture (JV) with real estate giant Unitech Group. It lost all its permits by Supreme Court order in February, part of the verdict cancelling all 122 telecom licences issued by earlier telecom minister A Raja. After January 18, 2013, when its revoked licences formally become invalid, Telenor would be left with about 36 million customers in India. Its average revenue per user is Rs 95. “We would better stay profitable in a more concentrated geography than to look at an extended business case in a bigger geography,” said Baksaas.

The company bought back its stake in the JV and then sold 26 per cent in its Indian unit, Telewings Communications Pvt Ltd, to Mumbai-based Lakshdeep Investments & Finance.

Baksaas said Telenor would continue to offer services in India under the Uninor brand. It has already invested about Rs 15,500 crore ($2.8 billion) in India so far.

Nor, said Baksaas, were they looking for other or more partners. “We have a partner in India, we have a structure; the rest is speculation,” he told reporters here today. He was responding to a question on recent media reports of Telenor being in talks with Indian telecom companies for potential merger or acquisition.

Earlier this week, Bloomberg said Telenor was in talks with Tata Teleservices to combine their services in India. Local media had also reported Telenor as talking to Loop Mobile for a possible acquisition. Terming these speculation, Baksaas said: “Telenor never comments on speculation.”