Oslo: Norway’s Telenor ASA plans to launch mobile services in India in the third quarter and will invest 22 billion crowns ($3.2 billion) in the venture until its expected operational breakeven in five years.

“For us this is a long-term project. The low penetration factor in India attracts us,” chief executive Jon Fredrik Baksaas told media.

Telenor said it would inject 8.7 billion crowns in new equity into India’s Unitech Wireless in 2009, raising its stake to between 54.3 and 60% in the third quarter. Unitech Wireless is part of realty group Unitech.

Shares in Telenor were off 0.1% at 42.65crowns at 1316 GMT (6:46pm IST), lagging a 2.3% rise on the DJ Stoxx Telecom Index.

Telenor’s management have decided to pursue expansion into India despite criticism from some shareholders, who had already forced the Norwegian company to scrap plans to finance the venture through a share issue.

Instead, Telenor will finance the project from its own funds, new debt and retained dividends, the company says.

Telenor said it was targeting an 8% pan-Indian market share and average market average revenue per user (ARPU).

It has targeted breakeven on the basis of EBITDA (earnings before interest, tax, depreciation and amortization) in around three years from launch and on the operating cash flow level in five years.

The Indian venture’s long-term goals include 30% EBITDA margin and 20% operating cash flow margin.