Uninor to scale down operations in 4 circles

Uninor is looking to scale down operations in four telecom circles -- Tamil Nadu, Karnataka, Kerala and Orissa -- the company said on Tuesday. 

Consumers in those circles will be sent notices a month before the scaling down of services begins. 

The company plans to allocate its resources to 9 other circles, comprising Uttar Pradesh East and West, Bihar, Jharkhand, Kolkata, West Bengal, Gujarat, Mumbai, Maharashtra, Goa and Andhra Pradesh.

"...with no sight of either auction rules or dates six months later, we support Uninor in taking this financially prudent decision. Telenor Group will continue to extend funding support to Uninor with its focus on nine commercial circles..." Jon Fredrik Baksaas, President and chief executive officer of Telenor Group, said in a statement.  The Norwegian firm holds a 67.25 per cent stake in Uninor. 

In his statement, Baksaas also urged the Indian government to provide clarity on the auction process for re-selling telecom spetrum at the earliest. 

Telenor's India unit is among eight carriers who are set to lose a total 122 zonal permits in September after a Supreme Court order to revoke all telecoms licences granted in a scandal-tainted 2008 sale.

The affected companies must bid in an auction to win back the permits. The rules and starting price of the auction are yet to be finalised.

"With lack of clarity around the auctions continuing, the company is now forced to take stronger steps to ensure optimal fund utilisation," Uninor said in a statement.

"Our plan now is to enter the auctions with a very strong presence in these nine circles, auction rules permitting," Sigve Brekke, the unit's managing director, said in the statement.

Telecom operator Uninor has sought foreign investment promotion board or FIPB approval for allowing Telenor, the company’s Norwegian parent, to bring in Rs 1,200 crore investment, sources told NDTV Profit.

The company is planning to utilize the money raised through a rights issue to meet the operating expenses for Uninor. The application before the FIPB has said that Uninor has not been able to raise money from banks.

The move assumes significance in the context of the company losing all 22 licences due to the February 2012 Supreme Court order that cancelled 122 telecom operator licences awarded by then telecom minister A Raja.

(with inputs from Reuters)