Emirates Telecommunication Corp Ltd (Etisalat) wrote off the value of its Indian operations on Thursday, booking an $827 million impairment charge, after the Supreme Court ordered the cancellation of 122 telecom licences.
The move by Etisalat, the Gulf’s No. 1 telecom operator by market value, follows a similar step by Norway’s Telenor which last week wrote down $721 million in licences and goodwill.
Meanwhile, Bahrain Telecommunications on Wednesday said it was selling its 43% stake in its Indian affiliate, in the first exit by a foreign operator after the February 2 ruling.Etisalat owns about 45% of Etisalat DB, a joint venture between India’s DB Group and Etisalat. The Indian firm had 1.7 million customers as of December and is ranked 14th in a market of 15 operators.
Abu Dhabi-based Etisalat paid $900 million for the stake in the firm, then called Swan, after the licence had been applied for and granted. The company has said that it invested more than $1 billion in the venture.
The operator said it had booked an impairment charge of 3.04 billion dirhams ($827 million), before federal royalties, against the full carrying value of goodwill for its Indian operations, including licences.
{{/usCountry}}The operator said it had booked an impairment charge of 3.04 billion dirhams ($827 million), before federal royalties, against the full carrying value of goodwill for its Indian operations, including licences.
{{/usCountry}}The Gulf operator said it was still mulling its strategic options in India and there may be more financial impact.
Separately, Etisalat said its 2011 net profit fell 23.4% o 5.8 billion dirhams from 7.6 billion dirhams in the year-ago period due to the impairment charge.
Etisalat made a fourth quarter net profit of 710 million dirhams, according to estimates, compared with a profit of 2.02 billion dirhams in the same period a year ago.