Business – Norway’s Telenor acquires additional 11% stake in Uninor for Rs 1,493 cr
NEW DELHI: Norway’s Telenor on Friday bought 11% more in Uninor, the mobile phone joint venture with real estate developer Unitech, for Rs 1,493
crore. The move will help the Indian venture fight the tariff war in the fast-growing wireless market.
“This third investment, as the earlier transactions, will provide Uninor with working capital to fund roll out of services across India,” its executive vice-president and head of Asian operations, Sigve Brekke said in a statement. With this investment, Telenor Group’s stake in Uninor raises to 60.1% and it has the option to raise it to as much as 67.25%. The Norwegian company will invest the fourth and final tranche by the end of this fiscal.
The final investment of about Rs 2,000 crore would come in by March, Uninor chief corporate officer Rajiv Bawa told ET. The funds would be used by the telco ‘to proceed as per the business plan and successfully expand operations in India’. Last year, Telenor agreed with Unitech to buy 67.25% in its wireless arm for about Rs 6,120 crore, and had said this investment would be made in four phases.
This latest round of investment that gives it the control, follows the Indian government’s recent approval allowing Uninor to have foreign shareholding up to 74%. Telenor invested Rs 1,370 crore in March ’09 and Rs 1,250 crore in May, taking its stake in Uninor to 49%.
Last month, Uninor launched services in India’s crowded mobile market with tariffs as low as 29 paise per minute for local calls and 49 paise for long-distance calls further intensifying the ongoing price war in the world’s most competitive telecom market. The telco currently offers services in eight of the 22 telecom circles in the country, and Mr Bawa said it would soon begin the second phase of expansion, where it would add another 3-6 regions.
The telco, which recently raised a Rs 5,000-crore short-term bridge loan from a SBI-led consortium to fund its rollout, is in talks with banks to raise another Rs 10,000-crore long-term debt.
It is confident of achieving a break-even in three years and may have positive operating cash flow within five years, according to Stein-Erik Vellan, its MD. It targets a 8% market share by 2018.
No comments yet.