Telenor slipped into the red during 1Q12, on the back of a 3.9 billion Norwegian Kroner (€515 million) write down on the value of its Indian joint venture, Uninor.
The telco slipped from a 3 billion Kroner profit in 1Q11 to a loss of 390 million Kroner in the recent period. The decline is almost entirely due to the cost of writing down its stake in Uninor, and offset steady growth in revenue to 25.1 billion Kroner.
Telenor revealed last week it would take the hit on its 1Q earnings, after India’s regulator TRAI announced plans to re-auction 2G licenses at a price some 13 times higher than in the original sale in 2008. Chief executive Jon Fredrik Baksaas says the firm is still working with India’s government to “clarify a sound framework for the industry,” but cautions it will be “almost impossible for us to participate in the auction,” at the price proposed.
Baksaas notes the firm’s Asian operations fuelled its revenue growth during the quarter, offsetting declines in its domestic and Danish businesses. The telco also raised its game in Eastern Europe, with increased operating profit at its units in Hungary and Serbia.
The firm is excluding Uninor from its full year outlook due to the uncertainty over licenses in India. However, it still predicts organic revenue growth of at least 4%, and EBITDA margin before other income and expenses in the range of 35% to 36%.