Telenor to dis-invest the 14,000 Crores from India

NEW DELHI : Norwegian firm Telenor has threatened to exit India, saying it will be tough for companies to comply with the spectrum auction norms and rollout obligations suggested by the regulator, Trai.

"In totality, if this is becoming policy, then the government is forcing us to leave. It's quite clear it will not work for us... We are willing to write off the Rs 14,000 crore we have invested," Unitech Wireless CEO Sigve Brekke told TOI. Telenor holds 67% in Unitech Wireless and is looking to sever ties with its Indian partner Unitech.

Unitech Wireless' 22 licences were among the 122 cancelled by the Supreme Court in February on the grounds that former telecom minister A Raja ignored norms while issuing them.

'Auction of 5Mhz spectrum is not auction'

While criticising Trai's spectrum auction norms and rollout obligations, Unitech Wireless CEO Sigve Brekke said that it wasn't just about the pricing. "Auction of 5 Mhz spectrum is not an auction. It's a trial balloon and the government is only trying to set the price level for future rounds. We can't do with so little spectrum," he said. The issue has already been discussed with the Norwegian parent and the top management of Unitech Wireless has also been sounded out about the possibility of walking out of India, he added.

Brekke's outburst coincides with petitioning done by the telecom companies to get the government to dilute the proposals.

But given the controversy around allocation of scarce natural resources, such as spectrum and coal, below the market price, it is unlikely that the government will risk reducing the floor recommended by Trai.

The SC has asked the government to auction licences and spectrum and the telecom department is expected to deliberate on the recommendations this week

The telecom regulator has suggested that the government start the auction with a base price of Rs 3,600 crore per megahertz, which translates to over Rs 18,000 crore for 5 Mhz, nearly 10 times higher than what Raja had charged for licence and spectrum.

The company, which operates under the Uninor brand, also accused the government of "setting a deliberate policy to reduce competition that has brought affordability" by auctioning only 5 Mhz of spectrum, especially when 20-30 Mhz was available.

In addition, Brekke said the rollout obligations - mandating that each operator set up infrastructure in villages with a population of 2,000 - was onerous. "It is like building 11 roads to the same village. It isn't logical to ask each operator to set up its own tower in every village when this is done smarter through collaboration and sharing between operators. Why use last decade's mindset to solve this decade's priorities. I don't think even incumbents are in a position to do this, leave alone the newcomers."

The Unitech Wireless CEO cited at least two other problems with the plan suggested by Trai and said refarming of spectrum, which will hit existing players, was not a viable solution as it will mean near doubling of the infrastructure if the operators were asked to move from the 900 Mhz band to the 1800 Mhz band.

In addition, he said the government was going beyond the mandate given to it by the Supreme Court. "A simple 'fix 2008 process' order has become a '20-year fix-all telecom strategy plan'. Simply re-award the new licences through auction. We do not see why this should be open to operators who aren't seeking a new licence but only capacity spectrum. The regulator seems determined to complicate this and bring in every telecom issue it possibly can."

source "timesofindia"

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