The court ordered cancellation of the licenses saying the process for allocating the permits and bandwidth was “arbitrary and unconstitutional” which facilitated corruption. A federal probe body alleges that the process favored some companies and cost the government $7 billion in potential revenue.
Telenor, 53.97%-owned by the Norwegian government, had bought the stake in Unitech Wireless after the Indian company got the licenses in 2008.
Post the court order, Telenor said it is writing down NOK4.2 billion in relation to licenses and goodwill in India.
Telenor entered India by acquiring a 67.3% stake in Unitech Wireless from real-estate developer Unitech Ltd. in 2008 for around 61 billion rupees ($1.25 billion), and has so far provided more than 80 billion rupees in corporate guarantees to the unit, making it the country’s second-largest foreign investor in the telecom sector, after Vodafone Group PLC.
On Monday Telenor indicated it may quit its Indian business if it fails to secure licenses to offer telecommunication services, after the country’s Supreme Court last week ordered cancellation of the permits of its local unit and several other companies.
But, as of now, the Norwegian company doesn’t plan to slow its operations in India, Sigve Brekke, executive vice president and head of Asian operations, told reporters. “We came here [to India] to win, we came here to stay.”
Unitech Wireless held 22 telecom licenses that allowed it to provide services across India, and has 40 million subscribers and 17,500 staff. The court order won’t be effective for four months and the company could continue providing services at least during this period.
Mr. Brekke said Telenor will look at the base price before deciding whether or not to participate in any fresh auction for second-generation licenses and bandwidth.
The company is in talks with India’s telecom regulator and the government to decide on the way forward, Mr. Brekke said.
Mr. Brekke said Rigmor Aasrud, Norway’s information technology and government administration minister who is in India on an official visit, will raise the issue with the Indian government.
A spokeswoman at the Norwegian embassy in New Delhi said Aasrud has sought a meeting at India’s ministry for communications and information technology. Officials at the ministry couldn’t be immediately reached for comments or a confirmation.
Telenor, meanwhile, reiterated it is considering all legal options, including filing a petition to review the court order, and Mr. Brekke said it will make a decision shortly on the legal step.