Telenor to skip telecom spectrum auction in India

July 19, 2016

Telenor Group CEO Sigve Brekke today announced that the telecom network operator will not participate in the spectrum auction in India in 2016.

Telenor India has regional presence in India. Buying spectrum is significant for Telenor to enhance its mobile data business in the country. Reliance Jio Infocomm and Bharti Airtel are expanding their 4G presence in India and will pose significant challenges to Telenor.

Earlier, several telecom analysis reports suggested that the India government could achieve bids worth $12 billion to $15 billion during the spectrum auction against target of $83 billion.

The announcement on spectrum auction came at a time when media reports suggest that Vodafone is targeting to purchase the Indian telecom operations of Telenor.

“We have decided not to participate in the upcoming spectrum auction, as we believe the proposed spectrum prices do not give an acceptable level of return. We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on Capex,” said Telenor Group CEO Sigve Brekke.

Incidentally, Telenor secured additional spectrum in Pakistan and completed a major 3G network expansion in Bangladesh, facilitating continued growth in data consumption. Telenor India is going slow on both Capex plans and spectrum acquisition. The company’s Capex in India was NOK 203 million in the second quarter against NOK 409 million in the first quarter.

Telenor India revenue

Telenor said it achieved significant operational and financial improvement delivered by Indian operation. Q2 revenue of Telenor India was NOK 1,551 million against NOK 1,520 million in Q1 2016.

Telenor India added 0.8 million subscribers (+13 percent) during the second quarter of 2016. Telenor India has a mobile subscriber base of 44.9 million at present. Telenor India achieved 12 percent organic growth in subscription and traffic revenues.