Telenor writes down remaining India assets

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Norway's Telenor has written down its remaining 3.9 billion Norwegian crowns of Indian assets and warned it would exit the market if current plans for a mobile telephone spectrum auction go ahead.

State-controlled Telenor had already written down 4.2 billion crowns related to its Indian assets in February after the Supreme Court ordered 122 permits granted to eight operators revoked because the original 2008 sale was tainted by corruption.

The court said the government must hold a new sale for the spectrum and the telecoms regulator proposed a near tenfold increase in the price, drawing howls of protest from companies hoping to win them back.

"If the recommendation (for the spectrum auction) in its current form should be approved by the Department of Telecommunications, it will be almost impossible to participate in the auction for Telenor," the firm said in a statement on Monday.

"If these recommendations become policy, then the Government of India will be forcing Telenor Group to exit," it added.

Telenor, which has over 30 million subscriptions in India among 140 million worldwide, has committed to invest a total of $3 billion in Asia's third-largest economy and two thirds of that has already been spent.

The new auction price is so high, it would easily push Telenor above its own self-prescribed investment cap for India, the world's second-biggest mobile market by users with over 900 million subscribers.

Analysts have welcomed Telenor's tough stance on India, saying the low-margin market is only draining the firm's cash and an exit would lift its near term earnings.

At 0940 GMT, Telenor shares were 3.9 per cent higher at 103.9 crowns, outperforming a 0.62 per cent gain in the OBX index as investor see an Indian exit as a short-term positive for the stock.