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Telenor spends big in Indian 2G auctions

Scandinavian operator Telenor reaffirmed its commitment to the Indian market by spending more than any of its competitors in the country’s 2G auctions. The Norwegian firm bid INR40.18 billion (US$730 million) to obtain licences for six of the most densely-populated telecom circles.

Other bidders included Bharti Airtel, Idea Cellular, Videocon and Vodafone, with the Indian government likely to net around INR95 billion (US$1.73 billion) in total from the auctions – significantly lower than the previously mooted figure of INR400 billion.

With comparatively low bids and a number of operators pulling out of the auctions, it has been suggested that the surprisingly high reserve prices are to blame. Following February’s cancellation of 2G licences issued in 2008, there was speculation that Telenor could divest its holding in joint venture Uninor and withdraw from the Indian market.

Instead, the firm settled its dispute with partner Unitech and has now acquired 5MHz of spectrum that will allow it to provide coverage to 600 million people across Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Pradesh East and Uttar Pradesh West. The company’s Uninor assets in these areas will be “seamlessly transferred to the new company and services will continue uninterrupted”, according to an official statement.

Telenor CEO Jon Fredrik Baksaas said: “The fresh licenses provide clarity for customers, operators and partners after a long period of uncertainty. We are looking forward to a more predictable and stable regulatory environment.”

The Indian Department of Telecoms revealed that Bharti bid INR86.7 million for a licence in just one circle, Idea bid INR20.05 billion for eight circles, Videocon bid INR22.21 billion for six and Vodafone bid INR11.95 billion for fourteen.

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