Telenor cutting ties with Indian partner

Dylan Bushell-Embling
16 Feb 2012

Norway's Telenor is seeking compensation from Indian partner Unitech regarding the cancellation of joint venture Uninor's operating licenses, and will look for a replacement partner for the venture.

In a statement, the operator revealed it will seek indemnity and compensation for the loss of all of Uninor's operating licenses.

Because Uninor will no longer have any operating licenses as of June, following the cancellation of 122 licenses earlier this month, Telenor also plans to call off its partnership with Unitech.

“It is Telenor Group’s position that the strategic partnership with Unitech Limited does not have a future, and it therefore will start the process of looking for a new Indian partner,” the statement reads.

Telenor will seek compensation for all investment, guarantees and damages caused by the court order, and will also make an indemnity claim against Unitech for its “failure to obtain spectrum in the strategically critical Delhi circle.”

Telenor claims that the legality and validity of the 2G licenses was a key aspect of its agreement with Unitech to buy into the venture.

“We believe that the Supreme Court’s cancellation of the [licenses] conclusively demonstrates a clear breach of Unitech’s warranties,” Telenor group general counsel Pål Wien Espen said, asserting that Unitech has agreed to compensate Telenor for any damages arising from a warranty violation.

The verdict has already shaken up India's telecom sector, with Bahrain's Batelco already exiting the market by selling out of the S Tel joint venture shortly after it was handed down.

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