New Delhi: Unable to secure long-term loans from Indian banks, Norway’s Telenor hopes to reach a consensus on a Rs 6,500 rights issue with its Indian partner in joint venture Unitech Wireless, which offers telecom services under the brand name Uninor, within a month.
Uninor, the brand name of the joint venture between Norway’s Telenor Group (which owns 67.25%) and Unitech Group (which owns 32.75%), operates in 13 circles.
“Right now, we are funding the company with short-term loans. These loans are coming from international banks and the reason for this is that there is no Indian bank that is willing to lend us money. I hope that the issue between Telenor and Unitech Group on Rs 6,500 crore right issue will be resolved in the coming month,” Uninor South Asian head Sigve Brekke said.
Brekke further added, “We are currently working on a long-term solution to bring in more equity to strengthen our financial position.”
Refusing to divulge the names of the international banks giving loans to Uninor, he added the company has already raised around Rs 5,000 crore from them.
The company recently approached telecom ministry seeking an additional 1.8 Mhz of radio waves in eight circles, based on subscriber-linked criteria. The company currently has 4.4 MhZ of spectrum.
Uninor has brought to the notice of the government the problems faced by telecom companies in availing loans.
“We have spoken to several ministers about this problem. It becomes difficult for us to operate because of shortage of funds,” he added.
Uninor has 27 million subscribers and is adding around 16 lakh customers every month. The company hopes to take its customer base to 30 million-plus users by the year-end and up to 50 million next year.
Though Uninor has been raising loans to strengthen its cash position, the company exuded confidence about breaking even in the next three years. “We should break even by first half of 2013,” Brekke said.
“As the market in coming months will be more rational, we are hopeful of tiding over the present scenario, provided we have ample clarity on Trai recommendations (on spectrum) and funding issues,” he added.
Uninor holds a pan-India UAS license to offer mobile telephony services in each of India’s 22 circles. It is yet to receive spectrum in some circles, including Delhi, J&K, Rajasthan, Assam and the North-East.
“We still believe in Indian market. We are confident that the new telecom policy will come out during second half of this year and will clear up doubts confounding licencing, spectrum and M&A issues,” he added.
Uninor services are available in the 13 circles of UP (West), UP (East), Bihar, Orissa, Kolkata, West Bengal, Tamil Nadu, Karnataka, Kerala, Andhra Pradesh, Mumbai, Maharashtra and Gujarat.