2G license: Telenor to write off $680 million

Telecom Lead India: Telenor on Monday wrote off its
remaining fixed and intangible assets in India worth to Norwegian crows 3.9
billion (over $680 million). The recent 2G spectrum issue has forced the mobile
giant to do this.

The telecom giant is attributing this to the uncertainty
that has increased significantly following the Supreme Court’s ruling in
February to cancel Unitech Wireless’s 22 licenses.

The recent TRAI recommendations on the re-auction of 2G
licenses and spectrum have also added fuel to the issue.

“Telenor is working actively towards Indian
authorities to bring forward an acceptable framework for continued operations.
As a precautionary measure, Telenor ASA has decided to write-down the remaining
fixed and intangible assets in India amounting to NOK 3.9 billion. The
write-down will be included in Telenor’s results for the first quarter 2012, to
be presented on 8 May 2012. After the write-down, Telenor has no further
accounting exposure related to India as of 31 March 2012,” the company
said in a statement on Monday.

Recently, the telecom regulator suggested that the
government start the auction with a base price of Rs 3,600 crore per megahertz,
which translates into over Rs 18,000 crore for 5 MHz, nearly 10 times higher
than what Raja had charged for license and spectrum.

Uninor is not willing to participate in spectrum auction as it can’t do with so
little spectrum.

The company, which operates under the Uninor brand, also accused the government
of setting a deliberate policy to reduce competition that has brought
affordability by auctioning only 5Mhz of spectrum, especially when 20-30 Mhz
was available.

According to Uninor, the rollout obligations  mandating that each operator
set up infrastructure in villages with a population of 2,000 was onerous.

Recently, the Unitech Wireless CEO cited at least two other problems with the
plan suggested by Trai and said that refarming of spectrum, which will hit
existing players, was not a viable solution as it will mean near doubling of
the infrastructure if the operators were asked to move from the 900 Mhz band to
the 1800 Mhz band.

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