Telenor plans to raise its ownership of Indian unit Uninor to 100 per cent from 74 per cent at present, 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 an application has been filed with the Foreign Investment Promotion Board (FIPB) of the Government of India. Telenor said it plans to invest an additional 7.8 billion rupees (€96 million/$131.03 million) in buying the stake currently owned by Lakshdeep Investments.
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.
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 its seventh circle, Assam, this year, and now has over 30 million subscribers.
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 statement
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