Telenor to focus on breaking even in six Indian zones
NEW DELHI (Reuters) - Norway's Telenor ASA(TEL.OL) is focusing on breaking even by the end of 2013 in the six Indian telecommunication zones where it recently won back airwaves, its chief executive said, playing down talks of a deal with a rival in the world's second-biggest mobile phone market.
Jon Fredrik Baksaas said in New Delhi the company will focus its resources on its total investment goal of 155 billion Indian rupees on the six zones where it will operate after its all-India permits were revoked because they were awarded in an earlier corruption-tainted auction.
"There are many questions that need to be addressed from us in the years to come," Baksaas said, when asked if the company would be looking to expand its footprint to other zones through mergers and acquisitions.
"But for now our concentration and focus is clear. Six circles, basic services and break-even for 2013," Baksaas said. India is divided into 22 telecommunication zones.
A source with direct knowledge said earlier this week that Telenor was in talks to merge its Indian operations with Tata Teleservices to gain a bigger foothold in the Indian market. Baksaas said on Thursday he would not comment on "speculation."
Telenor, which has more than 150 million customers in Europe and Asia, will be left with about 30 million customers in India after scaling back its operations, it said in a statement earlier on Thursday.
Baksaas said the company, which said its northern zone of Uttar Pradesh East had broken even, aims to achieve break-even on an operating and cashflow basis in all its Indian zones by the end of 2013.
"It's better to stay profitable in a more concentrated geography than to look at the potential loss-making of a longer business case and an extended business case in a bigger geography," he said.
Telenor, which agreed to enter India in 2008 by taking a majority stake in a nascent mobile phone operator, has struggled to make money in the crowded, highly-competitive market and had threatened to abandon India after the licence cancellation order, which the company said "unfairly harmed" it.
Telenor is moving its Indian business, which currently operates under the Uninor brand, into a new entity after it split from its former partner, Indian real estate firm Unitech Ltd. Telenor announced a new Indian partner last month.
(Reporting by Devidutta Tripathy; Editing by Matt Driskill)
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
Trending On Reuters
U.S. President Barack Obama watched a dazzling parade of India's military might and cultural diversity on Monday, the second day of a visit trumpeted as a chance to establish a robust strategic partnership between the world's two largest democracies. Full Article
Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll. Full Article