Oslo: Norwegian telecom group Telenor will take a larger stake in India’s Unitech Wireless than previously stated as a result of a $1.2 billion investment in the Indian group announced last October.
In a statement on Tuesday Telenor said it would take a stake of 67.25, up from a previously planned 60%, in Unitech Wireless. It said the stake purchase will be completed by the end of 2009.
“As part of the closing negotiations we agreed to increase our ownership share, largely due to the macroeconomic development since the deal was made,” Telenor spokesman Paal Kvalheim told Reuters.
“The ownership share will increase from 60 to 67.25% for the same capital injection,” he said, adding that Telenor will reach this share by the end of this year.
Analysts and shareholders have criticised Telenor’s plans to enter India, which they say is an already crowded mobile market -- the world’s second biggest.
Telenor has remained firm, saying its experience in Asia, where it is the second-largest foreign operator after Vodafone, will help it quickly gain market share as India’s mobile penetration rates double over the next three to four years.
But the scepticism has forced Telenor to scrap plans to finance the venture through a share issue and instead look to own funds, new debt and retained dividends.
“Upon completion of the first phase of the investment, Telenor’s ownership percentage will be 33.5%,” Telenor said in a statement, adding that this phase will be completed shortly.