A Norwegian minister warned on Saturday that India will lose
vital foreign investment if state-run Norwegian telecom giant Telenor has to
exit the country nursing multi-billion-dollar losses.
Trade Minister Trond Giske told reporters in New
Delhi that Telenor, which has a strong
balance sheet, can absorb the $3 billion investment write-off it would face if
it quits India due to telecom licensing problems.
“If a company
like Telenor can lose $3 billion in India, it has an effect on other foreign
investors. They ask if your (state-controlled) company can lose that money, how
will private companies be treated?” Giske said.
Policy uncertainty has been one of the main
criticisms of foreign investors.
In January, Telenor was among eight mobile operators
whose licences granted in 2008 were cancelled by the Supreme Court, on grounds
the sale was under-priced and corrupt in what has become one of the biggest
scandals in India’s history.
The court ordered an auction for new licences.
But the telecom regulator has proposed a 10-fold
hike in the spectrum auction base price from the 2008 sale and a big reduction
in bandwidth up for grabs.
“If these recommendations become policy, Telenor
will likely be forced to exit India” because the cost would be too high, Giske
said.
Addding that “Telenor is not just any company.”, the
company’s departure could also have “political implications,” he said.
Telenor earlier in the week said net quarterly
profit plunged to 583 million kroner (77.1 million euros, $100.5 million) from
nearly 2.8 billion kroner a year earlier due to a writedown on its Indian
operations, and Giske's comments came just after of it.
Other Indian mobile operators also oppose the
regulator’s proposals.
