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Norwegian telecom firm Telenor said on Friday it would invest Rs 780 crore to raise its stake in Telewings Communications, its India business unit, to 100 per cent from 74 per cent. It has applied to the Foreign Investment Promotion Board (FIPB).
Telenor Group, which operates under the Uninor brand name in India, will buy the 26 per cent equity held by the Sudhir Valia-controlled Lakshdeep Investments.
“We have always said we would like to increase our holding in the business and this further investment demonstrates Telenor’s long-term commitment to India,” said Sigve Brekke, executive vice-president.
In July last year, FIPB had approved Telenor’s proposal to increase stake from 49 per cent to 74 per cent. It had at that time invested Rs 1,000 crore for the extra 25 per cent stake.
“The current investment is not linked with Uninor’s market value. The value of the 26 per cent stake held by Lakshdeep Investments is decided based on the agreement between the two shareholders,” said Brekke.
Lakshdeep had taken 26 per cent equity in Telewings in October 2012 for an undisclosed amount. Telenor declined to disclose details on the premium both shareholders had agreed upon.
Telenor becomes the third foreign cellular telephone operator to seek a nod for 100 per cent control in the Indian business unit since the government allowed 100 per cent foreign direct investment in the sector, in July 2013. Vodafone India has raised stake in its Indian subsidiary to 100 per cent for an investment of Rs 10,141 crore. Russia’s Sistema JSFC has sought approval to increase its stake beyond 74 per cent in Sistema Shyam Teleservices.
Earlier this year, Uninor had announced an additional investment of Rs 500 crore towards expansion of its network and distribution infrastructure by 30 per cent. It had also acquired additional spectrum in six existing circles (about 7.2 MHz each) and added a new circle (Assam) in the previous auction, covering half of India’s population. Telenor entered India in 2009. It had a joint venture with real estate giant Unitech, in which the Norway-based telecom operator held a 67.25 per cent stake. The venture, Unitech Wireless, had operating permits in 22 telecom service areas. It had to trim operations after its licences were cancelled after the Supreme Court, in February 2012, quashed 122 operating permits of telcos as a result of the 2G spectrum allocation scam. Telenor then decided to bid in the fresh spectrum auction through Telewings, to continue its India operations.
It won fresh spectrum in six circles for Rs 4,018 crore.
“Uninor has now emerged as the fourth largest mobile operator by both customer and revenue share in its best circles. The company now has over 30 million subscribers and is set to launch services in its newest circle of Assam this year,” Telenor stated.
