India warns of 2G auction delay; Telenor nears exit
India’s Cabinet has approved a reduced reserve price for the country’s planned 2G spectrum auction, which will reallocate the licences that were cancelled in February this year. But telecoms minister Kapil Sibal has told the Supreme Court that the proposed August 31 deadline for the spectrum auction is still not likely to be met.
The reserve price has been set at Rs 140bn ($2.5bn) for 5MHz of pan-Indian spectrum in the 1800MHz band. It was initially priced at $3.4bn, but had drawn criticism from various quarters for being too high and was cited as one driver for Nordic operator group Telenor’s decision to exit the Indian market.
The reduction in reserve price has done little to dissuade Telenor, which has already written down its remaining fixed and intangible assets in India amounting to NOK3.9bn ($680m) and is looking to cut ties with its JV partner, Indian real estate firm Unitech.
The proposed auction of the Uninor JV’s assets was initially blocked but Delhi’s High Court has now overruled that order to allow Telenor to seek a buyer.
Telenor had revealed that it would invite bidders to take control of the Indian business, of which it owns 67 per cent, despite objections from Unitech. India’s Company Law Board (CLB) had initially blocked the move, but that decision has now been overturned by Delhi’s High Court.
“I am modifying the order of the Company Law Board to the extent that the date to receive the EoI (expression of interest to purchase the assets) from the bidders is extended till August 8,” said Justice Indermeet Kaur.
She added that that the CLB will make the final call on the proposed sale of Uninor’s assets, and a Uninor spokesperson has told Telecoms.com that the firm is expecting a final verdict imminently.
“Uninor has filed an appeal against the CLB stay on its auctions in the Delhi High Court and requested an urgent hearing,” said the spokesperson. “This has been granted by the Court and hearing on the matter has been scheduled for today.”
Meanwhile, the country’s new finance minister Palaniappan Chidambaram has ordered a review of retrospective tax laws that imposed a hefty $2.2bn bill on operator group Vodafone. Chidambaram said he is seeking reform to remove any apprehension or distrust in the minds of investors to the country.