Telenor may hang up on India partner

Dylan Bushell-Embling
26 Sep 2011
00:00
News

Thumbnail: 

Norway's Telenor is threatening to find a new partner for its Indian joint venture if existing ally Unitech does not live up to its funding obligations.

 

Telenor CEO Jon Fredrik Baksaas told India's Economic Times that it is entitled to seek a new partner for Uninor if Unitech does not participate in a planned 82 billion rupee ($1.66 billion) rights issue.

 

Unitech opposes the issue, and has gone to court in an attempt to block Telenor, which owns a controlling 67.2% stake in the joint venture, from conducting it.

 

But Baksaas has asserted that Unitech has an “obligation” to take part in the rights issue as part of its agreement to provide their part of Uninor's financing.

 

Telenor first entered the Indian market in 2008, with the $1.07 billion purchase of a majority stake in Unitech Wireless from Unitech. The deal closed in 2009, and services launched late that year.

 

But relations between Telenor and Unitech have been suffering since the dispute over the rights issue began.

 

Telenor is pursuing a low-cost approach in India in response to the intense competition and low margins in the market.

Source: 

telecomasia.net

Dylan Bushell-Embling

Related content