Telenor threatens to exit India if govt accepts TRAI s proposals

Norway's Telenor has warned it will exit India if the government accepts the telecom regulator's proposals to auction airwaves at 13 times the price used in 2008, highlighting the uncertainty shrouding a sector till recently seen as a poster child for liberalisation.

The head of the company's Asia unit said it would be "impossible" to continue operations in the country of more than a billion people, in which it has invested over $3 billion since buying a majority stake in the telecom business of Unitech, a Delhi-based real estate company, in 2008.

"If these recommendations become policy, we will be forced to exit India. It will be impossible for us to continue operations here," Telenor Executive Vice-President & Asia head Sigve Brekke said in an interview. "This is not a threat, it is a reality," he said.

Brekke's comments come just a day before theTelecom Commission, the highest decision-making body in the sector, meets to decide on the recommendations put forward by the Telecom Regulatory Authority of India.

But two analysts said quitting India would impact Telenor's growth potential as the Scandinavian telecom major has been depending on Asian and emerging markets for growth, with business in Europe, its main territory, declining.

"The India exit will mark a monetary loss, but will also mean a three-year setback to Telenor on growth in the next two years," said one. They asked not to be named.

Telenor had forecast a breakeven for Uninor, its Indian unit, in 2013.