Telenor has increased its stake in Indian unit Uninor to 100 per cent from 74 per cent, following a similar move by Vodafone in April that saw the UK-based operator increase its stake in Vodafone India to 100 per cent.
The Norway-based operator said it completed the acquisition of the 26 per cent stake in Telewings, held by Lakshdeep Investment & Finance, after receiving approval from the Foreign Investment Promotion Board (FIPB) of the Government of India. As a result, Telenor now takes full ownership of the company that operates under the brand name Uninor.
"Telenor Group has a long-term view on India, and we are encouraged by the strong growth of our Indian operation. The company continues to capture market share every month and is leading in new subscriber additions in many of its circles," said Sigve Brekke, EVP of Telenor Group and chairman of the Telewings board.
Telenor originally filed its application to raise its Uninor stake in June. At the time, the company said it planned to invest 7.8 billion rupees (€99.7 million/$127 million) in buying the stake.
Vodafone and Telenor have taken advantage of new direct foreign investment rules in India. Until recently, foreign companies were permitted to own up to 74 per cent of Indian companies, but India has now liberalised the rules in different sectors including telecoms to allow up to 100 per cent ownership in a bid to attract foreign investment.
Telenor's move is also aligned with its strategy to focus more on Asia Pacific amid faltering sales at its European operations. In the first quarter of 2014, the bulk of net additions came from Telenor's businesses in Bangladesh, Pakistan and India, which all recorded strong rises in operating profit year-on-year. In the second quarter, Telenor also said Thailand, Malaysia, Pakistan, Bangladesh and India remained strong markets.
Uninor is the local brand name under which Telenor provides mobile services in six of India's 22 telecoms service areas. The company plans to launch services in Assam early next year, and now has over 32 million subscribers (as of the second quarter of 2014). Telewings' revenues in the first half of 2014 compared to the same period last year increased by more than 40 per cent, Telenor added.
Like many operators, Telenor has not had it easy in India over the years: Uninor started its operations in 2010, but in February 2012 the Indian Supreme Court quashed 122 telecoms licences, including those held by Uninor, and directed the government to issue new licences and spectrum through auctions. In November 2012, Telenor acquired licences in six circles with 20-year terms.
Uninor acquired additional spectrum in February 2014 in four of its six existing circles--UP East, UP West, Bihar and Jharkhand and Andhra Pradesh--and in the new circle of Assam. The other two circles are Gujarat and Maharashtra.
For more:
- see this Telenor release
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