Telenor, the Norwegian telecom operator, which owns 49 percent in new telco Unitech Wireless hasn’t yet received an approval from India’s Foreign Investment Promotion Board to increase its stake to 74 percent, but has outlined plans to launch services in 5 circles in Q4 – before the end of this year. GSM (Huawei, Alcatel Lucent and Ericsson) and IT outsourcing (Wipro) agreements are in place, and the company has also received NLD and ILD licenses through an acquisition of Unitech Long Distance Communication Services Limited for NOK 17 million.
Unitech Wireless reported an operating loss of NOK 80 million, with no revenues, since operations haven’t been launched yet, and a CAPEX investment of NOK 424 million. Telenor expects Unitech Wireless to contribute to a marginal increase in revenues, an EBITDA loss in the range of NOK 1.5–2.0 billion and capital expenditure in the range of NOK 3.5–4.5 billion for 2009.
During the earnings conference call, CEO Jon Frederik Baksaas was asked about whether he thinks Loop Telecom stole Unitech Wireless’ thunder by launching first.
Baksaas’ response was measured: “The growth in India is significant in this period, and we saw that last year when we looked at the market. We were absolutely sure that the market would double till 2012. We need to be at street level as soon as possible that is why launchin 2012. We have to be competitive,whether there is a newcomer or an existing player. Any newcomer will have to use pricing to create traction, but remember that the newcomer will also be the one with maximum capacity. Market leaders tend to run full members, and do not have the same ability to pull in, for example, offer free minutes. The market has shown that, when Reliance came with their offerings in the beginning of this year.”