Telenor loses 22 Indian licenses
Telenor is set to lose its Indian 2G licenses following a local court decision to scrap a total of 122 licenses awarded in 2008.
The Norway-based telco’s local subsidiary Uninor stands to lose 22 licenses as a result of the Supreme Court decision, however the operator states it is too early to comment on the impact as it hasn’t had time to fully review the ruling.
Assuming there is no challenge to the court decision, the licenses will be binned at the start of June, a company statement reveals. The firm hints it is hopeful that India’s government will intervene and order the Telecom Regulatory Authority of India (TRAI) to reallocate the licenses.
The court decision follows a scandal surrounding the allocation of 2G licenses in 2008 that claimed the head of Andimuthu Raja, the telecoms minister who oversaw the sale. At its simplest level, Raja is accused of applying 2001 prices to the later sale, a move that India’s Comptroller and Auditor General reckons resulted in 70% of winning applicants being unqualified to participate in the auction, and cost the government up to $39 billion (€29.6 billion) in lost revenue.
In addition to scrapping the licenses, the Supreme Court is ordering operators to pay a penalty of 50 million Rupees (€774,422), Bloomberg reports. Analysts told the Wall Street Journal the decision will hit foreign firms harder than domestic companies, which is likely to impact future investment in India.