The Telenor Group, a Norway based telecommunications company, commenced its operations and services in India by partnering with Unitech Wireless Ltd., a local joint venture. Known as Uninor in India, the Telenor Group succeeded with progressive rise in the number of subscribers throughout the country. A recent scandal in the Indian telecom industry had made the country’s top court to revoke Telenor’s licenses. This action had jeopardized the Norwegian group. Norway’s minster of trade and industry, Trond Giske, has approached India’s telecom minister, Kapil Sibal, to discuss on the issues related to it. To mention, the Telenor Group had invested heavily on its operations and services in India.
Uninor has been performing well with its innovate practice methods and dedicated employees. The brand has been highly acclaimed among the users for its cheaper prices. In February 2012, the Supreme Court revoked 122 telecom licenses due to the possibility of a corruption issue in the telecom Industry. Unfortunately, out of those 122 revoked licenses, 22 were Uninor’s. However, Supreme Court asked the government to allot new licenses and spectrum to the operators by means of auctions. In April, Telecom Regulatory Authority of India proposed the sale of of mobile phone bandwidth to all the telecommunication companies. In fact, TRAI had mentioned a base auction rate which is several times costlier than the earlier auction rate that was held in 2008.
The new proposals from the government seems to be exorbitant for the Norwegian company. The Chief Executive of Telenor expressed that it would be quite impossible for them to continue operations and services in the country with the current proposed rates. If that’s the final decision of the government, Telenor may terminate its operations in the country. To mention, the Norwegian government too owns more than fifty percent in Telenor. Trond Giske opened up that if Telenor fails with its investments in India, it would be the biggest loss for a Norwegian company with foreign investments.
Just before the last week of April, 2012, TRAI announced the recommendations on conducting new license auctions. Meanwhile, the Supreme court extended the deadline for the issue of new 2G licenses and the auction itself to 31st of August. It also mentioned the deadline for the service providers that depended on revoked licenses and legalized them to continue operations till September 7th. By the end of April, Telenor ASA has written off its remaining fixed and intangible assets in India. A few days later, Telenor filed an application to the Supreme court of India to look over TRAI’s recommendations. If those proposals are approved without any revision, Telenor might withdraw its operations in the country.
Telenor is finding its ways to arrive at a favorable solution in order to continue their operations in the future. A casual glance at Uninor’s subscriber growth rate would portray the company’s progressive and successful growth in a short period of time. It’s now in the hands of the Supreme Court to decide upon the issues and recommendations. However, we expect a favorable solution for the service providers that wouldn’t affect the consumers in the country.
Via: 4-Traders.