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
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.