Norway-based Telenor Group has said that the strategic partnership with Unitech Limited does not have a future, and it therefore will start the process of looking for a new Indian partner.
The group has also issued a notice to Unitech that it will seek indemnity and compensation following the cancellation of Uninor’s 22 licenses by the Supreme Court of India.
“The Supreme Court of India on Feb. 2 passed an order to revoke 122 licenses issued to all operators on and from Jan. 10, 2008. This included all licenses issued to Uninor. The Supreme Court decision refers to actions that happened prior to Telenor Group’s entrance into India,” the telecom giant said in a statement.
“Telenor Group holds Unitech Ltd. liable for the breach of warranties related to the cancellation of the licenses – seeking compensation for all investment, guarantees and damages caused by the Supreme Court Order. Telenor Group also makes an indemnity claim against Unitech for the failure to obtain spectrum in the strategically critical Delhi circle,” the company further states.
“The legality and validity of the licenses was a fundamental term of the share subscription agreement between Telenor Group and Unitech Limited. We believe that the Supreme Court’s cancellation of the Unified Access Service Licenses conclusively demonstrates a clear breach of Unitech’s warranties,” Telenor’s Group General Counsel Pal Wien Espen said.
The group said that in the share subscription agreement between the partners, Unitech has “irrevocably and unconditionally” agreed to indemnify and hold harmless the Telenor Group from all damages that may be suffered as a result of breach of any of the agreed warranties.
“The fact is that Uninor as a consequence of the judgment will no longer hold any UASLs. Telenor will therefore exercise its entitled right under the share subscription agreement to hold Unitech Ltd. liable to indemnify and compensate Telenor Group for its investment in India,” Espen added.
Telenor stated that it will consider every option available to secure the continued successful development of its mobile services in the country.
According to a report in the Economic Times, which quotes a source familiar with Telenor’s future plans, the group had tapped London-listed metals group Vedanta Resources’ Indian arm, Sterlite Industries, and Kolkata-based Srei Infrastructure, which runs mobile tower company Viom Networks, to be its new partner.
Telenor has invested $1.24 billion for a 67.25% ownership stake in Uninor and has fully guaranteed $162 million of short-term debt.
