Uninor pulls down profitability of Telenor

By Telecom
Lead Team:
Norwegian mobile operator Telenor posted a loss of 1.93 billion
kroner ($335 million) for the fourth-quarter against profit of 2.10 billion
kroner for the same quarter last year.


Telenor valued
the loss of Uninor’s 22 licenses at 4.1 billion kroner ($710 million), which
reduced 2011 earnings to 7.9 billion kroner ($1.4 billion), down 45 percent
from 14.3 billion kroner in 2010.


The company’s
revenues rose to 25.43 billion kroner during the quarter from 24.85 billion
kroner in the same period a year ago.


For the
fourth-quarter, the company reported an operating loss of 4.97 billion kroner
from its Indian operations (Uninor), against a loss of 1.27 billion kroner in
the year-ago period.


However, the
company’s revenues increased to 936 million kroner from Indian operations
during the quarter under review from 400 million kroner in the year-ago period.

For the full year, net profit to the company plunged to 7.94 billion kroner
from 14.33 billion kroner in the previous year. The company’s annual revenues
rose to 98.52 billion kroner from 94.84 billion kroner.

In 2011, the company added 29 million mobile subscriptions, out of which 7
million were added in the fourth quarter. In India, its mobile subscriptions
declined to 4.1 million during the December quarter from 4.33 million in the
year-ago period.

Telenor is the majority stakeholder in Uninor, its joint venture with real
estate firm Unitech. Uninor has invested about Rs 14,000 crore in India so far
and has 17,500 employees, both directly and indirectly.


forecast that revenue would grow 5 percent in 2012 but losses from the license
loss will also continue to impact financials.


As per
official release, Telenor made the provisions to write-down the losses on the
balance sheet much before last week’s Supreme Court order cancelling its


The co­m­pany
said it would be careful on future investments in India after its licences were


We are working to protect our investments in all possible manners, and will
consider every option prior to any further investments. We expect Indian
authorities to conduct a swift and fair process. The apex court last week
ordered the cancellation of 122 telecom licences including 22 held by Uninor ,”
said Jon Fredrik Baksaas , president and CEO of Telenor group.




The Norwegian
government has already raised the recent issue of scrapping 2G licenses with
Indian authorities.


The Norwegian
government owns nearly 54 percent stake in Telenor, which holds a 67 percent
stake in Unitech Wireless. Telenor is planning a diplomatic and legal measure
to secure its investments in India. However, it is also readying with an
aggressive bidding plan to bag licences in a fresh auction.


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