Telenor Seeks Full Ownership of Indian Unit

By R. Jai Krishna

NEW DELHI--Telenor ASA (TEL.OS) said Friday it has sought approval from the Indian government to take full ownership of its local unit in a deal estimated at 7.8 billion rupees ($131 million), as it seeks to strengthen its presence in the world's second-largest telecommunications market.

The Norwegian telecom company currently has a 74% stake in Uninor, the local brand name under which it provides cellphone services in six of India's 22 telecom service areas. The remaining stake is held by Lakshdeep Investments & Finance Pvt. Ltd., which is owned by Sun Pharmaceutical Industries Ltd. (524715.BY) Director Sudhir Valia.

Telenor's move to fully own its Indian unit follows a government decision in July last year to ease barriers for foreign investment in telecom companies. Until then, New Delhi had a 74% limit for foreign holding in the sector.

The company's application follows similar move by its peers Vodafone Group PLC, which bought out its Indian partners earlier this year. Another operator, Russia's Sistema JSFC has approached the government for approval, but its application is yet to be cleared by the authorities.

The Oslo-based company said Friday it has filed an application with the Foreign Investment Promotion Board, a panel of senior bureaucrats that vets foreign direct investments in the country, to increase its stake to 100%. It will invest 7.8 billion rupees to buy out the remaining stake held by Lakshdeep Investments.

Telenor entered India in 2008 by buying a majority stake in a cellphone joint venture with real estate developer Unitech Ltd. (507878.BY). But the relationship soured after Unitech Wireless Ltd., the joint venture company lost all of its permits due to a court order in February 2012. The Supreme Court of India scrapped 122 permits including all of Unitech Wireless' calling the allotment of those permits were illegal.

The two partners split in late 2012, and Telenor formed a new joint venture with Mr. Valia's Lakshdeep Investments in a bid to continue its operations, and to abide by Indian rules.

Telenor acquired fresh permits in six service areas in 2012 and another one in 2014. It currently provides cellphone services to about 30 million users.

Write to R. Jai Krishna at [e-mail]

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