Norwegian telecom firm Telenor on Wednesday posted a loss of 1.93 billion kroner ($335 million) for the December quarter, wei-ghed down by hefty impairment losses related to cancellation of 2G licences in India. In the year-ago period, the company had a net profit of 2.10 billion kroner. The results included huge losses of 4.1 billion kroner related to cancellation of 2G licences of its Indian joint venture Uninor.

The company’s revenues rose to 25.43 billion kroner during the quarter from 24.85 billion kroner in the same period a year ago. During the quarter, the company registered an operating loss of 4.97 billion kroner from its Indian operations (Uninor), against a loss of 1.27 billion kroner in the year-ago period. However, the company's revenues climbed to 936 million kroner from Indian operations during the quarter under review from 400 million kroner in the year-ago period.

For the full year, net profit to the company plunged to 7.94 billion kroner from 14.33 billion kroner in the previous year. The company’s annual revenues rose to 98.52 billion kroner from 94.84 billion kroner.

In 2011, the company added 29 million mobile subscriptions, out of which 7 million were added in the fourth quarter. In India, its mobile subscriptions declined to 4.1 million during the December quarter from 4.33 million in the year-ago period.

Telenor is the majority stakeholder in Uninor, its joint venture with real estate firm Unitech. Uninor has invested about Rs 14,000 crore in India so far and has 17,500 employees, both directly and indirectly. As per the results posted on its website, Telenor made the provisions on the balance sheet much before last week’s Supreme Court order cancelling its licences. The co­m­pany said it would be careful on future investments in India after its licences were revoked. “The recent ruling of the Supre­me Court to cancel all telecom licences issued in 2008 severely penalises Telenor for actions that took place before we entered India.

We are working to protect our investments in all possible manners, and will consider every option prior to any further investments,” Telenor group president and CEO Jon Fredrik Baksaas said. “We expect Indian authorities to conduct a swift and fair process,” he said. The apex court last week ordered the cancellation of 122 telecom licences – including 22 held by Uninor.

However, Uninor managing director Sigve Brekke on Wednesday sounded confident about the business. “We are waiting for more clarity on the new mechanism through which new licences will be awarded. Despite the cancellation of the licences, the company added 3 lakh customers in one just weekend,” Brekke told journalists. “This is the highest weekend subscriber addition ever for Uninor.” Seeking restrictions of bids in the proposed auctions, Brekke said: “If the big guys are allowed to participate, they will pick up more spectrum.” “The auction shouldn’t be for everyone. It should be only for newcomers. The spirit should be to increase competition,” he said, addi­ng that smaller players will bring down tariff in the industry. Uninor has already given few inputs to the Telecom regulatory Authority of India (Trai) on the new auctioning process “A customer in Delhi today pays up to 60 per cent higher tariff for the same services you get in Bangalore, simply because Delhi does not have a single new operator competing in the market,” he said. Uninor is still waiting for spectrum to launch services in Delhi. “Even if you are not a Uninor customer today, you have benefited from us, because of competition from us and other new players. Every operator has been forced to make tariffs affordable,” he said. He said the company’s contract with IT solutions provider Wipro was “safe, despite the cancellation of its licence.”

“Nothing will happen to these contracts signed by the company for managing its IT services. We told our IT partners that these contracts will be carried on,” he said. The cancellation of licences had created fears among IT service providers that their revenues would also be hit. Wipro earns 15 per cent of its revenue from IT services to the telecom sector. Brekke said Wipro is the only major IT company with which Uninor has contracts.

Other three networking partners with which Uninor has contracts are Nokia-Siemens, Alcatel and Hua­wei. He said those contracts, too, were safe. These three players provide networking solution to Uninor. “Work would continue,” he said.

sameerrbakshi@mydigitalfc.com