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Business – Telenor plans nationwide service in India

BANGKOK: Norwegian telecoms group Telenor said on Monday it planned to expand its operations in India to offer nationwide services this year, which
will mean its investments in Asia will be higher than last year.

Telenor, which has operations in eight of India’s 22 telecom zones, has no plan to join in the price-cutting in the world’s fastest-growing mobile market even though its current tariffs were not the cheapest, Sigve Brekke, head of Telenor Group’s Asian operations, said.

“We are very satisfied with our operations in India because we are going to launch faster and bigger than we thought,” Brekke, who is based in Bangkok, said in an interview.

The former Norwegian deputy defence minister said Telenor planned to bid for 3G licences for only parts of India, since it would be very expensive to have a nationwide network. Telenor has bought into a young Indian telecom firm, Unitech Wireless, a unit of property developer Unitech Ltd, which started services in December under the Uninor brand.

It has said it planned to expand to five more zones early this year. The company holds telecom licences for all of India and is aiming for 8 per cent of the Indian mobile market by 2018.

India is currently the world’s fastest-growing wireless market and the second-largest with more than 500 million users. Despite a successful launch and 1.2 million subscribers in its first month of operations, Telenor maintained its India business forecast of breaking even at the EBITDA level in three years and operational cash flow level in five years, Brekke said.

Excluding India, where growth will be very high, Telenor expected its operations in four countries in Asia to post average “mid-single-digit” revenue growth this year, led by strong growth in Bangladesh and Pakistan, Brekke said.

“Growth in India will be very high since it started from zero. For the four countries, Bangladesh and Pakistan will grow most, followed by Malaysia and Thailand,” he said, adding a better economic outlook should boost growth.

The Telenor group entered the Asian region in 1996 through its investment in Grameenphone in Bangladesh. The region has generated about 30 per cent of group revenue but the launch in the Indian market should boost the contribution from Asia this year, Brekke said. He gave no details about investments since 2009 figures would be published as part of quarterly earnings next month.

Telenor, which spent about $1.2 billion to take a 67.25 per cent stake in Unitech, put another Rs 14.93 billion ($327 million) into the Indian firm to raise its holding to 60.11 per cent this month.

Investments in Bangladesh, Pakistan and Thailand would depend on the rollout of 3G networks, Brekke said, adding he hoped a much-delayed 3G auction in Thailand would happen in the second half of this year. Telenor, the number two operator out of five in Pakistan, had no need to seek a merger there as its business was going well.

“Everyone is talking to each others, but nothing has finalised. Our position is very strong. We don’t need to consolidate,” Brekke said.

Telenor, which had voiced some interest in Vietnam, was less interested in the Southeast Asian country now, after mobile penetration there rose in recent years, he said.

“We are not aggressively looking at other markets right now. We have our eyes open, but no concrete plan,” Brekke said. Shares in Telenor, worth $22 billion, were up 2.1 per cent at 79.45 crowns at 0936 GMT, outperforming a 0.44 per cent drop in the Oslo bourse.

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January 18, 2010 - Posted by | Uncategorized |

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