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Telenor says evaluating possible India investment

Telenor says evaluating possible India investment
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First Published: Wed, Sep 03 2008. 05 13 PM IST
Updated: Wed, Sep 03 2008. 05 13 PM IST
Oslo: Norwegian telecom group Telenor said on Wednesday that it was open to possible entry into India’s growing mobile market, a move which would crown its Asia-focused investment strategy.
Media reports have linked Telenor, which has mobile operators in Pakistan, Bangladesh, Thailand and Malaysia, to a potential move into India.
Unlike many of its markets which have already matured, India remains a fast-growth hub with huge potential, say analysts. On the other hand, the market is fragmented with very low prices.
“Concerning India, we can say that we are constantly moving around in the world assessing possibilities. (And) we have recently been in India,” Telenor spokesman Dag Melgaard said.
“We have previously also stated that India was too big (for Telenor), as we have said about China, but that doesn’t stop us from assessing such possibilities,” Melgaard said. He repeated Telenor’s policy of not commenting on “speculation” about deals.
Telenor, with more than 150 million mobile clients worldwide and worth $25 billion, says it is the second biggest non-Asian operator in Asia after Vodafone.
Shares in Telenor were off 3.1% at 83.40 crowns at 0956 GMT, lagging a 1.0% decline in both the DJ Stoxx Telecoms Index and the Oslo bourse.
“What’s weighing the most is the realisation of the increased probability of them entering India,” said one trader, adding that political uncertainty in its other markets, such as Pakistan, Thailand and Ukraine, also hurt Telenor’s stock.
National or regional player?
According to an unsourced report on website www.business-standard.com, Telenor and Kuwait-based Zain Telecom have started negotiations with Mumbai-based Loop Telecom. It was unclear whether the two players were considering a majority stake.
Loop, fully owned by BPL Mobile which is controlled by conglomerate Essar group, operates GSM mobile services in Mumbai and is one of seven operators with a licence for pan-Indian mobile operations, Business Standard said.
Analysts said Telenor was probably “too late and too small” to enter India on a national level but that it could still find interesting niches in regions.
However, any investment would boost capex spending and lower the probability of increased dividends, said analysts.
“I’m not surprised they are assessing the situation. it’s all about the conditions -- what kind of licences, which regions and what price,” said Carnegie analyst Espen Torgersen.
“When it comes to India, it has similar markets to Bangladesh and Pakistan, from where Telenor can export their knowhow,” he said.
Last year Telenor changed its strategy of entering countries only with a controlling majority stake, in a bid to continue its fast growth even as its markets mature.
The Norwegians had voiced interest in entering Vietnam, but analysts said Telenor was beaten to the punch by Russian phone group Vimpelcom, which signed a deal this year.
Telenor has a strategic stake in Vimpelcom. Analysts say Telenor’s top new market could be Indonesia.
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First Published: Wed, Sep 03 2008. 05 13 PM IST