March 27, 2012 / 7:02 AM / 8 years ago

UPDATE 2-Telenor seeks payback from India in mobile licence row

* Invoking rules under bilateral agreement on trade

* Telenor has not specified compensation; newspaper says $14 bln

* Telenor also wants new Indian partner (Adds Indian government comments)

By Devidutta Tripathy and Sumeet Chatterjee

NEW DELHI, March 27 (Reuters) - Norwegian mobile phone group Telenor will seek compensation from India if a dispute over the cancellation of its Indian unit’s telecoms licences cannot be resolved.

Telenor’s Indian unit is one of several firms set to lose their operating permits in early June after the country’s Supreme Court last month ordered all 122 licences awarded in a scandal-tainted 2008 sale to be revoked.

Telenor spokesman Glenn Mandelid said the company had not stated a specific compensation amount in its letter to New Delhi, but planned to seek compensation for “all investment, guarantees and damages.”

“We are hopeful that it remains the government’s intent to protect and encourage bona fide foreign investment in the country,” he said on Tuesday.

The Times of India reported on Tuesday Telenor was seeking nearly $14 billion in damages. This would be far more than the 140 billion rupees ($2.7 billion) Telenor says it has invested in India.

The scandal was over alleged irregularities in way the telecoms licences were awarded in 2008, with a state auditor saying they were given out at “unbelievably low” prices that it said may have cost New Delhi much as $34 billion in lost revenue. A former telecoms minister, who had presided over the sale process, and several corporate executives have been charged by federal police.

Telenor said it informed the Indian government of its “intent to invoke” the provisions of the so-called Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore.

The Norwegian company owns the stake in the Indian joint venture through its unit registered in Singapore.

Telenor wants a solution within six months or will seek international arbitration for failure to protect its investment in the country, the Times of India said, citing a notice it said was sent to the prime minister’s office as well as to the telecoms and corporate affairs ministries.

The prime minister’s office could not immediately comment, while telecoms secretary R. Chandrashekhar said his office was yet to receive the notice.

Corporate affairs minister M. Veerappa Moily said he was yet to see Telenor’s letter, according to a Press Trust of India report on the Hindu Business Line newspaper’s website.

FOREIGN TELECOMS

Telenor, which bought into its Indian venture after the licences had been awarded, has said it has been “unfairly harmed” by the court order. It has filed a petition in India’s Supreme Court seeking a review of the order, while the Norwegian government is also lobbying for the state-backed company.

Telenor paid about $1.2 billion for a 67.25 percent stake in its Indian unit and has guaranteed bank loans for the venture.

Its Indian JV, which operates under the Uninor brand name, has been the most aggressive of the newer telecom companies in the fiercely-competitive Indian market. Uninor ranks eighth in the market of 15, with 41 million customers as of February.

Last month, Russian conglomerate Sistema asked India to settle within six month a fight over the court order to revoke 21 licences held by its local unit, citing a bilateral pact between India and Russia.

Among other foreign telecoms groups affected by the licence cancellation, Abu Dhabi’s Etisalat has said it will shut down its Indian operation on March 31. Bahrain’s Batelco, whose Indian JV is set to lose all its six licences, has agreed to sell its 43 percent stake in Indian affiliate S Tel to its local partner for $175 million.

Telenor has also been embroiled in a dispute with its Indian partner, Unitech Ltd.

Telenor has accused Unitech of “fraud and misrepresentation” after the licence cancellation order and has said it would seek to migrate the business to a fresh venture with a new partner.

$1 = 51.33 Indian rupees Additional reporting by Frank Jack Daniel; Editing by Matt Driskill and Jane Merriman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below