India claims more tax from Telenor

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Norwegian telecoms firm Telenor, which ran into severe problems doing business in India, now faces a new tax claim from Indian authorities amounting to NOK 775 million (nearly USD 100 million). Telenor disputes the demand.

Telenor ran into lots of trouble in India after it launched its Uninor venture there in 2009. Now Telenor reportedly faces more tax claims after finally trying to sell off its Indian operation and cut losses last year. PHOTO: Telenor

Newspaper Dagens Næringsliv (DN) and TDN Finans reported Wednesday that the extra tax claim is being issued in connection with Telenor’s former mobile phone business in India. It involved major disagreements with Telenor’s partner in India, Unitech, the loss of licenses to Telenor and seven other mobile phone companies, and huge expenses for new licenses. DN has reported that Telenor’s investment of around NOK 15 billion in India since 2008 has been largely written off, and that Telenor also lost around NOK 10 billion on its Indian operations.

Telenor entered into an agreement last February in which India’s largest mobil firm, Bharti Airtel, would take over Telenor India and Telenor’s 44 million customers in India. Airtel acquired Telenor’s mobile frequencies, licenses, employees and customer base along with obligations tied to frequency agreements and leases on mobile towers.

Telenor thus thought it’s “nightmare” in India was over, but now Indian authorities are demanding additional taxes from Telenor and four other telecoms firms in India. The authorities claim they underreported revenues from operations in India, according to Indian news portal Oneindia.

Telenor spokesman Atle Lessum said the company was aware of “possible” tax claims against several mobil operators in the country, based on audits for 2010-2015. “They include all the large operators in the market, including (the former) Telenor India,” Lessum told DN. He said the extra tax demands are being disputed by the entire industry, though, and were likely to be challenged in court.

He said it was thus difficult to know when the dispute may be resolved, adding that Telenor had still not received any formal tax claim.

newsinenglish.no/Nina Berglund