Telenor will sit out of Indian spectrum auction

20 Jul 2016

Telenor Group has revealed it will not participate in India's upcoming spectrum auction, leading to speculation about the company's future in the market.

The company has decided after thorough consideration not to participate in the auction, “as we believe the proposed spectrum prices do not give an acceptable level of return,” Telenor said in its second quarter report.

“We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on capex,” the report states.

Telenor reported revenue from India of 1.55 billion kronor ($181.9 million) in the second quarter, up 13% from the prior year. But Telenor India also reported a wider loss for the quarter of 132 million kronor, and 3.32 billion kronor for the first half of the year.

Given that Telenor only operates in six of India's 22 telecom circles, and exclusively holds 1800-MHz spectrum - limiting its ability to effectively roll out 4G services - Observers had considered additional spectrum to be essential to Telenor India's ongoing operations.

With the operator electing to sit out of the auction, some experts are speculating that the company could pull out of the market.

By contrast, Telenor's operations in Myanmar are already cashflow positive, the Q2 results show. Telenor Myanmar reported an operating profit of 614 million kronor, on the back of 3% higher revenue of 1.49 billion kronor.

Telenor Myanmar added 1.4 million new mobile subscriptions during the quarter, taking its total base to 16.9 million. But ARPU in local currency decreased by 8% due to promotional spending and increased penetration in rural areas.

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