Telenor wants to hold 74% stake in India JV

Is on a lookout for a new partner following cancellation of 2G licences

Norwegian telecom major Telenor on Sunday said it would want to hold the maximum permissible stake in its Indian joint venture, after it inducts a new partner.

Sigve Brekke, executive vice-president of Telenor group, and MD of Uninor, said they would want the new partner into the joint venture to hold 24 per cent. “We would want to hold 74 per cent, which is the maximum stake that can be held by a foreign entity,” he said. In the current joint venture with Unitech, Telenor holds 67 per cent.

Few days after the Supreme Court cancelled all the 2008 telecom licences, the Norwegian company decided to break all ties with its partner, Unitech. Unitech had procured these tainted licences, and later brought in Telenor as its partner.

Telenor is currently looking out for a new partner. “There are some good companies in India,” said Brekke. He said they are seeking partners who would share their long-term views and let Telenor have full control of the operations.

The company also said they have talked to the ministry and the Telecom Regulatory Authority of India (Trai) about the continuity of licences beyond June. The Supreme Court said the licences would be valid till June, and asked the government to go ahead on re-auctioning before that. “They have given us an assurance on the alignment,” Brekke said.

Brekke also said a number of issues would need clarity before the auction process. Referring to the possibility of getting the spectrum fee back for cancelled licences, he said it’s another ball up in the air.

Uninor also said the government should go ahead with two auctions — one for new entrants who need start-up spectrum, which includes those whose licences were cancelled and any other new operators. The second auction, the company says, should be for old operators or the incumbents.

Brekke said existence of multi-operators would keep the tariffs of the incumbents down as well. Quoting the example of Mumbai and Delhi circles, he said the tariffs of incumbents are around 60 per cent lower in Mumbai than Delhi, which has lesser competition.

Raising debt is yet another worry for Uninor as banks have tightened their grip since the 2G-spectrum scam broke out. “Banks had closed their doors after the scam broke out, and the doors are still closed,” said Brekke.

Uninor has got some foreign debt after guarantees from the parent company. But any more loans for a possible auction would be tough due to lack of clarity. Uninor also said it has added 9,789 new points of sale and 11 new distributors, after their licences were cancelled by the SC.

“We are not spending time yelling at anyone or trying to get back everything. We are preparing for the future,” said Brekke.