Home >Industry >Telecom >Uninor begins exiting Kolkata, West Bengal

New Delhi: Mobile-phone services provider Uninor has started the process of winding up its business in telecom circles where it has lost licences to operate because of a 2 February Supreme Court order and where it failed to secure permits in the recent spectrum auction.

“With no new 1,800 Mhz spectrum auctions being indicated by the authorities and 900 Mhz spectrum also likely not to be available to auction winners in 2013, Uninor will have to stop its operations in the two circles of Kolkata and West Bengal on January 19, 2013," Uninor said in an emailed statement. “The company will issue a public notice to all its customers in Kolkata and West Bengal requesting them to exhaust their balance by 18 January 2013 and utilize mobile number portability to port out to any other operator of choice."

A mobile phone operator has to give at least a month’s notice to affected subscribers before shutting its network in a particular area, according to government rules.

The 2 February Supreme Court verdict had cancelled 122 telecom licences and spectrum awarded to nine companies on the grounds that the allocation procedure was faulty. The court further ruled that the cancelled resources should be auctioned by the government.

The auction of 1,800 MHz spectrum concluded on 14 November after two days of bidding. Uninor was able to secure spectrum in six circles, including Uttar Pradesh East, Uttar Pradesh West, Bihar (including Jharkhand), Andhra Pradesh, Maharashtra and Gujarat where the company has about 30 million subscribers.

Norwegian mobile-phone company Telenor ASA has set up a separate company Telewings Communications Services Pvt. Ltd with partner Lakshdeep Investment and Finance Pvt. Ltd to run its local business after ending ties with property developer Unitech Ltd, its erstwhile joint venture partner, over differences on funding. The assets of Uninor will be transferred to Telewings Communications, 74% owned by Telenor, over the next few years.

“Uninor operations in 12 other circles where minimal obligatory rollout had been conducted to meet the license conditions will also cease on January 19, 2013 resulting from the same Supreme Court order," the Uninor statement said. “Operations in the Mumbai circle are continuing as Telenor Group evaluates the possibility of participating in the second auction for spectrum in Mumbai indicated by the Indian authorities."

Communications minister Kapil Sibal has said that there will be a second auction of unsold spectrum before the end of March. Department of telecommunications officials said that the government will issue spectrum guidelines later this week and an information memorandum regarding the auction by 15 January. The notice inviting applications for the auction is expected by the first week of February, the officials said on condition of anonymity.

The six circles where fresh spectrum has been secured together account for more than half of India’s population, 80% of Uninor’s subscribers and 83% of its workforce.

The process of business transfer has already been initiated to ensure that services to all Uninor customers in these circles continue uninterrupted. Some employees are being offered job opportunities in circles where the operator will continue offering services while others are being helped with finding new positions in other telcos and partners, a senior executive of Uninor said.

Uninor has 5.6 million subscribers in Kolkata and West Bengal of which 57% are active, according to Telecom Regulatory Authority of India’s (Trai) October data.

Uninor has also dropped the 90-day lock-in stipulation to allow customers to port their phone numbers even if they have taken up a Uninor subscription recently. The company has stopped offering new connections and recharges in the affected circles.

The firm also said that it was putting roaming arrangements in place for the remaining 16 circles where its services will not be available once the court’s verdict takes effect.

Prior to the auction, the company had already started winding up its business in four circles, including settlements with vendors and distributors.

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