Norway’s Telenor has written down its remaining fixed and intangible assets in India amounting to 3.9 billion Norwegian kroner, or about Rs 3,580.2 crore, the firm said on Monday.
“The write down will be included in Telenor’s results for the first quarter 2012, to be presented on 8 May 2012. After the write down, Telenor has no further accounting exposure related to India as of 31 March 2012,” the company said in an announcement to the Oslo Stock Exchange.
Noting that the operational performance of its subsidiary in India, Uninor, has developed according to plan in the first quarter of 2012, Telenor said that following the Supreme Court’s ruling in February to cancel Uninor’s licences and the recent recommendations from the Telecom Regulatory Authority of India (TRAI) regarding the 2G license re-auction, the “uncertainty has increased significantly”.
“If the recommendation from TRAI in its current form should be approved by the Department of Telecommunications (DoT), it will be almost impossible to participate in the auction for Telenor. Telenor is working actively towards Indian authorities to bring forward an acceptable framework for continued operations,” the company said in the announcement. It added that it was writing down its assets as a “precautionary measure”. Telenor holds a 67 per cent stake in Uninor.
Telecom regulator TRAI last week recommended that the government should auction 5 MHz of airwaves in the 1800 MHz band and that companies would have to pay a minimum Rs 3,622.18 crore for every unit of spectrum. This is about 13 times more than what they paid in 2008 when licences were given under the then telecom minister A Raja. At that time, permits were bundled with 6.2 MHz of 2G spectrum for Rs 1,659 crore. Following the current developments regarding the award of 2G licenses, Telenor ASA has decided to write down NOK 4.2 billion related to its investments in India. The write down is an accounting exercise and has no impact on the running of Uninor’s operations and the fact that the Uninor operations will continue.