Telenor starts efficiency drive, keeps India goals

Telenor starts efficiency drive, keeps India goals

Oslo: Norway’s Telenor ASA set new targets for improving operational efficiency by 2013 on Tuesday and affirmed financial targets for its fledgling India operations.

Telenor said its flagship investment in India would break even on at a core profit level (earnings before interest, tax, depreciation and amortisation) three years after its launch in late 2009. On the operating cash flow level, break even would come five years after launch, it said.

In its capital markets day presentations, Telenor said it aimed to “continue to deliver growth above peers" and “develop Uninor in India according to plan".

Telenor is one of the world’s largest mobile operators, with 184 million subscriptions in 14 countries across the Nordics, central and Eastern Europe and Asia.

Some analysts have been concerned that Telenor would not make money in India, as it entered the Asian nation’s crowded and super-thin-margin mobile market later than most competitors.

Telenor said it had identified significant potential to improve its operational efficiency and initiated programmes to boost margins in all business units.

Telenor said it aimed to reduce its operating expenditure to 35% of sales by 2013 from 39% in 2009, with capex down to 10% of sales by 2013 from 13% last year.

The operator said its mobile operations in Pakistan, which has been hit by devastating floods, broke even on an operating cash flow basis in 2009-2010 and that it was “cautiously optimistic" on the country’s overall prospects. It said that by 2013 Telenor aimed to strengthen its No. 2 position on the Pakistani mobile market with 10% revenue growth year-on-year, a capex to sales ratio of below 12% and an operating cash flow margin of above 25%.