Te­lenor Hangs up on In­dia, to Sell Busi­ness to Air­tel

Buy to boost Bharti’s 4G air­waves and rev­enue mar­ket share, help­ing it in bat­tle against Jio

The Economic Times - - Front Page - Our Bureau

New Delhi: Te­lenor wrapped up its ill-starred In­dia ven­ture by agree­ing to sell the busi­ness to mar­ket leader Bharti Air­tel, which will take on some of the Nor­we­gian tele­com gi­ant’s lo­cal li­a­bil­i­ties in re­turn. The ac­qui­si­tion, which comes amid mar­ket con­sol­i­da­tion, will boost Bharti’s 4G air­waves and rev­enue mar­ket share, strength­en­ing its hand in the bat­tle against Re­liance Jio In­fo­comm. The move marks the end of Te­lenor’s bid to gain a share of the world’s big­gest tele­com mar­ket af­ter China. The ex­er­cise saw the com­pany form­ing a part­ner­ship that was em­broiled in one of In­dia’s most high-pro­file cor­rup­tion scan­dals and hav­ing all its li­cences scrapped by the Supreme Court as a re­sult. Un­der pres­sure from com­pe­ti­tion, the par­ent was forced to mark down the value of its lo­cal unit by 6.3 bil­lion krone (.`5,000 crore/$760 mil­lion) last year.

Bharti will take over out­stand­ing spec­trum pay­ments worth around .₹ 1,650 crore and other op­er­a­tional con­tracts, in­clud­ing tower leases with Bharti In­fratel and In­dus Tow­ers, be­sides em­ploy­ees and 44 mil­lion cus­tomers, tak­ing In­dia’s big­gest phone com­pany to 300 mil­lion sub­scribers.

“The de­ci­sion to exit In­dia has not been taken lightly. Af­ter thor­ough con­sid­er­a­tion, it is our view that the sig­nif­i­cant in­vest­ments needed to se­cure Te­lenor In­dia’s fu­ture busi­ness on a stand­alone ba­sis would not have given an ac­cept­able level of re­turn,” Te­lenor Group’s global CEO Sigve Brekke said in a joint state­ment on Thurs­day.

ET was the first to re­port on talks be­tween Te­lenor and Bharti on Jan­uary 3. The companies said the deal is ex­pected to close in 12 months. The In­dia unit will be treated as an as­set held for “sale and dis­con­tin­ued op­er­a­tions” in Te­lenor Group’s fi­nan­cial re­port­ing from the first quar­ter of 2017.

Te­lenor has op­er­a­tions in the six tele­com cir­cles — Andhra Pradesh, Bi­har & Jhark­hand, Gu­jarat, Ma­ha­rash­tra, Ut­tar Pradesh (East) and UP (West). It also has spec­trum in As­sam where it

Bharti will take over out­stand­ing spec­trum pay­ments of 1,650 cr and op­er­a­tional con­tracts be­sides staff and 44 m cus­tomers

Voda­fone Group CEO Vit­to­rio Co­lao told se­nior ex­ec­u­tives at the telco’s In­dia unit that the pro­posed com­bined en­tity with Idea would “truly be a co-man­aged com­pany”, likely to be mod­elled along the lines of the Bri­tish car­rier’s joint ven­tures in the Nether­lands and Aus­tralia, re­ports Kalyan Par­bat.

hasn’t started op­er­a­tions. These seven cir­cles con­trib­ute about 35% to Air­tel’s to­tal rev­enue.

“On com­ple­tion, the pro­posed ac­qui­si­tion will un­dergo seam­less in­te­gra­tion, both on the cus­tomer as well as the net­work side, and fur­ther strengthen our mar­ket po­si­tion con­sid­er­ably in sev­eral key cir­cles,” said Gopal Vit­tal, man­ag­ing di­rec­tor, In­dia and South Asia, Bharti Air­tel.

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