Telenor scales down India operations from 13 to 9 circles

Telenor will scale down its India operations from 13 circles to 9 as the company struggles to keep afloat given the continuing uncertainty around the spectrum auctions.

This will result in a gradual scale down of operations in Tamil Nadu, Kerala, Karnataka and Orissa circles.

Network in these four circles remains operational and the scale down of operations in these circles will be gradual.

Uninor will give all its existing customers a 30-day notice before any network scaledown is expected to begin.

However, the company will stop activation of any new subscribers in these four circles of Kerala, Karnataka, Orissa and Tamil Nadu with immediate effect.

Uninor has 6.8 million customers in these four circles of which 46 per cent are active users.

Uninor has a total of around 400 direct employees in these four circles of Karnataka, Kerala, Orissa and Tamil Nadu. As it gradually scales down, Uninor will evaluate possibilities of relocating some of the employees to other Uninor circles and also provide assistance in securing employment outside the company.

The company said that it will simultaneously strengthen operations in the other 9 circles of UP East, UP West, Bihar & Jharkhand, Kolkata, West Bengal, Andhra Pradesh, Mumbai, Maharashtra and Goa and Gujarat. "This will place the company in a stronger financial and operational position to enter the auctions from, rules permitting. The company will maintain a smaller network and remain operational in the four effected circles. The other nine circles will continue to build up their operations aggressively," Uninor said.

Following the licence cancellation in February, Uninor has faced an uncertain environment that also affects ability to secure operational funding. With lack of clarity around the auctions continuing, the company is now forced to take stronger steps to ensure optimal fund utilisation.

“Since the Supreme Court order, we have pursued every possible measure to take our business forward in its current form. However, we are now forced to take this difficult but necessary decision,” said Mr Sigve Brekke, Managing Director, Uninor.

“Our plan now is to enter the auctions with a very strong presence in these nine circles, auction rules permitting. We will focus funds, resources and all our efforts to meet even more aggressive targets in these nine circles.”

Uninor said it will closely work with each of its distribution channel partners in the four circles to enable liquidation of market stock or compensation as needed. The company will work jointly with its business partners to together recast several agreements in line with the new focus.

“As things stand today, we do not foresee the need for any major changes after this in our circles. We plan to use the remaining months to aggressively build operations in these nine circles. Rules permitting, we will enter the auctions fighting fit,” said Mr Brekke.

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