Telenor asks India to protect 'lawful' investment
Telenor says it expects India to protect its "lawful investment" after an Indian court scrapped mobile permits held by the Norwegian giant and other firms on grounds the licensing process was rigged.Updated: Feb 04, 2012 17:10 IST
Telenor says it expects India to protect its "lawful investment" after a court scrapped mobile permits held by the Norwegian giant and other firms on grounds the licensing process was rigged.
Telenor entered India's growing telecom market in 2009, paying $1.1 billion for a majority stake in mobile firm Uninor, which holds 22 of the 122 licences cancelled by the Supreme Court on Thursday.
"We look to the government to arrive at a fair outcome that doesn't jeopardize our lawful investment," the company said in a statement in New Delhi late Friday.
Telenor said separately Friday in Oslo it would take a charge of 4.2 billion kroner (550 million euros, $720 million) on its Indian unit. After the charge, the book value of the company's Indian assets would be worth 2.4 billion kroner.
The Supreme Court scrapped the second-generation (2G) mobile licences issued in 2008 to a host of companies with foreign partners on the grounds the sale was fraudulent, costing the government up to $39 billion in lost revenues.
Telenor is the second largest foreign investor in the country's telecom sector, after Britain's Vodafone Group.
"When we have not caused any of the faults found by the courts, it is obvious to everyone our investment must not be jeopardised," the company said.
"We urge the government to ensure that a foreign investor that had nothing to do with these processes is not harmed."
Telenor added it was reviewing the court order "and will consider necessary actions to safeguard our investment."
Indian law allows the firms affected by the court order to seek a review of the ruling and companies are weighing what action to take.
Analysts say the ruling will further sour investor sentiment toward India that has already been rattled by a slowing economy and regulatory uncertainty.
Telenor partnered with Indian property developer Unitech, one of a number of Indian companies with no telecom experience that bought mobile licences and later sold stakes in their new cellular operations to foreign investors for hefty sums.
Other foreign investors included Gulf-based Etisalat and Russia's Sistema JSFC.