Telenor rules out Indian mergers until regulations are clear

The Scandinavian operator Telenor has stated that it will not discuss any mergers or acquisitions in India before the country’s government has clarified legislation concerning the telecom sector.

The chief executive of Telenor’s Indian branch, Yogesh Malik, said: “We await clarity in the sense of rules, in the sense of regulations, in the sense of terms for mergers and acquisitions and spectrum fees.”

He added that in the meantime, the operator would look towards reducing tariffs and increasing subscribers from smaller towns. Of the six telecom circles in which it is active – which between them cover around 50% of the country’s population - Telenor has broken even in three and is on course to do the same in the other three by year-end 2013.

India has recently updated its regulations, allowing telecom companies to be owned in full by foreign firms. The move is intended to encourage foreign investment, but definitive rules for mergers and acquisitions within the sector have not yet been finalised.

Telenor’s previous foray into the Indian market was Uninor, a joint venture with Unitech. After settling a dispute, the two partners agreed to transfer the operator to Telewings, controlled by Telenor. This was swiftly followed by Lakshdeep Investment & Finance buying a 26% stake in Telewings.

Malik did not confirm whether Telenor would reacquire this stake once the new regulations had been confirmed.

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