The decision by The Supreme Court of India to cancel 122 2G spectrum licenses has impacted foreign players who have considerable stake in those Indian telcos impacted by the decision.
According to a Press Trust of India report, United Arab Emirates-based Etisalat on wrote off $827 million worth of value in its Indian operations by way of an impairment charge. Etisalat owns a 45% stake in telecom operator Etisalat DB, a joint venture with DB Realty.
Norway-based Telenor – a majority shareholder in its JV with Unitech – wrote off about $721 million worth of value from its Indian operations as a result of the verdict.
“The recent ruling from the Indian Supreme Court to cancel all telecom licenses issued in 2008 severely penalizes Telenor for actions that took place before we entered India. 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,” Telenor CEO Jon Fredrik Baksaas said while announcing the company’s results on Wednesday.
A news report in the Economic Times stated that Bahrain-based Batelco also announced the sale of its 43% stake in its Indian affiliate S-Tel for $175 million, making it the first foreign operator to exit India following the 2G verdict.
“S-Tel said that Bahrain Telecom was ‘very uneasy’ in India and therefore decided to sell its stake, while Telenor has also not ruled out an eventual exit and is currently looking to file a review petition,” the ET report stated.
A fourth foreign operator, Russia’s Sistema, has said that it would stay in India and there was no option of exiting the country.
“Exiting is not an option being considered as of now. We have long-term plans for India and we are working with the government to see how best we can move ahead. The rules of the auction will be crucial and we hope that the government policy will create some differentiation between new and incumbent players,” Vsevolod Rozanov, Sistema Shyam CEO, was quoted as saying by the Business Line.
Sistema is reportedly planning to file a review petition against the Supreme Court verdict.