Etisalat writes off over $820 mn in India operations post 2G verdict

UAE-based Etisalat Group on Thursday announced that it will write off about $820 million, or 3,044 AED (Emirati Dirham) as part losses incurred from its India operations.

The decision comes after India’s Supreme Court earlier this month cancelled 122 licences of wireless telephony operators.

Etisalat was present in India as Etisalat DB Telecom, a tie-up with the DB group here, and had licences for 15 circles. .

"Etisalat’s management has decided to recognize an impairment charge in its 2011 consolidated financial statements amounting to an aggregate of AED 3,044 million (about USD 820 million)...," the company said in a statement to the Abu Dhabi Securities Exchange.

The firm’s consolidated net profit is expected to be reduced by about $277 million.

Etisalat owns about 45 per cent stake in Etisalat DB Telecom, a joint venture with Indian player DB Realty.

The decision makes Etisalat the second foreign firm to write off its India investment, after Norway’s Telenor

Last week Norway-based Telenor, a majority shareholder in Uninor, had written off about $721 million from its Indian operations. All 22 licences held by Uninor were cancelled by the Supreme Court, which held that the first-come, first-served policy under which they had been granted in 2008 was discriminatory to other players.

Former telecom minister A. Raja is accused of having arbitrarily changed the rules for awarding of licences from an open auction to a first-come, first-served model to favour some companies, and which eventually cost the exchequer a substantial loss of revenue.

The Supreme Court’s decision took the entire industry by surprise and significantly alters the competitive landscape in India’s telecommunications market, it said.

 (With inputs from PTI)