Telenor posts huge operating loss, hints at India exit | business | Hindustan Times
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Telenor posts huge operating loss, hints at India exit

The Indian arm of Telenor is also looking to expand its 4G footprint, but the company said it will have to rethink if it cannot get spectrum at reasonable price

business Updated: Apr 27, 2016 19:19 IST
A Telenor Group poster. The company is reconsidering its strategy in India after running up huge losses
A Telenor Group poster. The company is reconsidering its strategy in India after running up huge losses(Reuters file photo)

Posting a huge operating loss of 3,100 million Norwegian Krone (around Rs 2,530 crore) for its Indian telecom business, Telenor on Wednesday hinted at exiting India if it fails to procure spectrum at reasonable rates.

The Indian arm of Telenor is also looking to expand its 4G footprint, and will offer the lowest tariff for these services as part of its affordable pricing strategy.

While announcing the financial results in Norway, Telenor global CEO Sigve Brekke said: “Long-term presence in India is dependent on our ability to secure additional spectrum. We are not able to compete with the current spectrum portfolio we have in the growing data market...We are Looking at upcoming auctions and potential trading options.”

Sigve Brekke, president and CEO of Telenor worldwide. “We must find a solution sometime this year,” he said about the company’s India operations (REUTERS File photo)

Telenor India offer GSM-based services in six out of 22 circles in the country. The Telecom Regulatory Authority of India (Trai) has recommended Rs 11,485 crore per Mhz base price for the auction of spectrum in the 700 Mhz band, the highest ever for any radiowave.

“We are in India to make money, if we don’t see return then we need to look at other alternatives,” Telenor CFO Morten Karlsen Sorby said.

The operating loss of Telenor India widened to NOK 3100 million (R2,532 crore) in the January-March quarter of 2016, compared to NOK 159 million (Rs 129 crore) in the same quarter a year ago. Revenue, however, rose 11% to NOK 1306 million (R1,067 crore) during the quarter, against the year-ago period.

“Operating profit was hit by NOK 2.9 billion (Rs 2,369 crore) in impairment and write-down,” Telenor said.

The company’s average revenue per user in local currency fell 8% to Rs 90. The decline was primarily driven by lower voice consumption.

Telenor, which has already launched 4G services in Varanasi, intends to roll out high-speed services in six to eight cities across six circles in the next 45-60 days.