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Telenor Q3-2012 Concall: Looking For Direct Switchover From Unitech; 2G Auction Participation Not Confirmed

On Telenor‘s earnings conference call, the company said that while it has registered to take part in India’s 2G spectrum auction, the decision to participate has not yet been taken. “We have also settled with Unitech Ltd. The final decision (on participation) will be taken very close to the auctions (in November),” Telenor CEO Jon Fredrik Baksaas said.

Frankly, given the buildup from Telenor to the auction – the separation from Unitech, the registration for the auction, and the fact that they’ve continued to operate in many circles, we’d be really surprised if they don’t participate. Uninor needs government approvals for a “direct switchover” from Unitech to a new separate company, “which will be our bid base, and we need to have the proper approvals on that transfer, as one example,” Baksaas clarified.

Baksaas declined to comment on questions on plans for getting a new partner for India and the timeframe for their investment, and how this situation will impact investments in network. Later in the call, he said that the telecom industry in India has been put under immense strain, and India has seen their telecom investments being halved both in 2011 and in 2012 compared to 2010.

The reduction in operating circles – down to 9 from 13, helped Telenor reduce losses in India – “A major factor on the improved EBITDA this quarter is India, with the reduced losses contributing more than NOK 400 million (approximately 372.89 crore)” Baksaas said, adding that the exit costs in the four circles cost the telco NOK 126 million (approximately Rs 117.90 crore). Their ARPU declined in India, and there were an increase in competition, with usage coming down in some of the circles. However, “We’re making adjustments to bring usage back and prices up,” and “On the customer side, we have recovered traction. Both in September and the pickup in October has continued, in the circles that we now focus on,” Baksaas added.

Uninor is also waiting and watching for the impact on incumbent telcos on the structure of payments payments of the license fee, as well as the refarming of the 900 MHz spectrum.

Read: Uninor Q3-2012 results

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