Technoglitch
Core Member
Aditya Birla Group’s telecom arm Idea Cellular is learned to be in talks for a likely buyout of Norwegian telecom giant Telenor’s fully-owned India business.
Sources said the CEOs of the two companies have met.
Telenor recently wrote off Rs 1,879 crore as impairment — meaning that some of the investments it made in India will never see return-on-investment.
“We are in India to make money... If we cannot see that return through either an auction, participation in an auction, or through a spectrum trading deal, we need to look at alternatives,” Sigve Brekke, CEO of Telenor Group, said on an analyst call.
Early this year, Idea Cellular CEO Himanshu Kapania went to Oslo to meet Brekke. Sources said Brekke had suggested that Idea split the company in two verticals — premium and mass market.
Things is said to have changed after former banker Gunn Wærsted joined as the new chairperson of Telenor. She wanted RoI. India was far from that. With 50 million subscribers and an average-revenue-per-user of nearly Rs 100, it was still half of Airtel’s ARPU, and a user base that’s a fifth of it.
But, Idea sees an opportunity. Telenor offers voice services on the 1800 Mega-hertz band. That’s a band which operators globally, and in India, too, are using to offer fourth-generation data service. Also, Telenor, valued at Rs 11-12,000 crore according to industry sources, is investing Rs 1,240 crore to upgrade its existing network.
Earlier, in 2015, sources said that Telenor was in talking to Airtel, but that deal fell through. If the Idea deal falls through, Telenor will be left with only two options – either buy spectrum through an auction, or exit India.
An Idea might be behind Telenor’s likely exit from India | business | Hindustan Times
Sources said the CEOs of the two companies have met.
Telenor recently wrote off Rs 1,879 crore as impairment — meaning that some of the investments it made in India will never see return-on-investment.
“We are in India to make money... If we cannot see that return through either an auction, participation in an auction, or through a spectrum trading deal, we need to look at alternatives,” Sigve Brekke, CEO of Telenor Group, said on an analyst call.
Early this year, Idea Cellular CEO Himanshu Kapania went to Oslo to meet Brekke. Sources said Brekke had suggested that Idea split the company in two verticals — premium and mass market.
Things is said to have changed after former banker Gunn Wærsted joined as the new chairperson of Telenor. She wanted RoI. India was far from that. With 50 million subscribers and an average-revenue-per-user of nearly Rs 100, it was still half of Airtel’s ARPU, and a user base that’s a fifth of it.
But, Idea sees an opportunity. Telenor offers voice services on the 1800 Mega-hertz band. That’s a band which operators globally, and in India, too, are using to offer fourth-generation data service. Also, Telenor, valued at Rs 11-12,000 crore according to industry sources, is investing Rs 1,240 crore to upgrade its existing network.
Earlier, in 2015, sources said that Telenor was in talking to Airtel, but that deal fell through. If the Idea deal falls through, Telenor will be left with only two options – either buy spectrum through an auction, or exit India.
An Idea might be behind Telenor’s likely exit from India | business | Hindustan Times
