Telecom Lead India: Telenor’s 32.75 percent stake partner Unitech will exit from the troubled telecom joint venture.
The real estate firm will get a nominal amount for amicably settling the dispute and exiting from the telecom venture.
This will enable Telenor to find another partner. Telenor has 67.25 percent stake in the joint venture.
Unitech Wireless has about 5 percent share in India’s mobile phone market of 908.36 million subscribers.
Unitech’s decision to exit from the telecom venture is likely to end months-long dispute and litigations.
Unitech Wireless is preparing to participate in the upcoming 2G spectrum auction through a new entity.
Unitech and Telenor have agreed to transfer the business in Uninor to a new entity controlled by the latter.
Though Unitech agreed to dispose of its shareholding in Uninor for a nominal amount, both parties did not disclose the amount.
Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties will be withdrawn. The realty firm, however, said the company will continue to retain its economic rights associated with its current shareholding in Uninor.
“We are pleased with the settlement reached between Unitech and Telenor. All existing disputes with Telenor are suspended and will be withdrawn upon successful transfer of business of Uninor to a new entity controlled by Telenor,” said Unitech Chairman Ramesh Chandra.
In August, TelecomLead.com reported that Telenor is planning to slash 2,000 jobs in Indian telecom market. This is part of a cost-cutting drive. Telenor will reallocate resources to more profitable regions in India and brought forward by a year and a half the break-even point for a unit that has never turned a profit.
“By doing this, we believe that we can make (Indian unit) Uninor self-financing, that means cash-flow break-even, within the end of 2013. In the previous business plan, this target was the first half of 2015,” said Telenor Chief Executive Jon Fredrik Baksaas.