Telenor tries to cut losses in India
July 25, 2012
Norwegian telecoms firm Telenor is pulling out of its weakest markets in India and concentrating instead on operations where it performs best. Meanwhile, the company has reported weaker results than expected, largely because of its ill-fated Indian venture.
Telenor’s involvement in India has been a huge drain on the company and that was reflected in its second-quarter financial results released on Tuesday. The company pre-tax profits fell by more than half and operating results were down 38 percent.
The company continues to wait for the Indian government to reveal details of a new auction of mobile phone licenses, after Telenor’s partnership with an Indian firm resulted in the pending loss of its existing licenses because of a corruption scandal. The loss has led to talks between government officials at the highest levels in India and Norway, since the Norwegian government remains the major shareholder in Telenor.
Telenor CEO Jon Fredrik Baksaas said Telenor will now concentrate its Uninor operations in India on a smaller geographic area, but stressed that it’s an area where “around a billion people” live.
Telenor invested more than NOK 18 billion in Uninor and has felt compelled to write off most of it. A new auction of telephone licenses is to be held by August 30, with Uninor’s earlier licenses will be void from September 7.
Views and News staff