Telenor on Tuesday said that it will maintain peak funding for Uninor at Rs 15,500 crore.
The Norwegian company said that Uninor would have been earnings before interest, taxes, depreciation, and amortisation (EBITDA) break-even in the second quarter of 2013 if it hadn't been for the current regulatory situation.
Rising Uninor losses
Uninor's losses have mounted to 4.68 billion Norwegian Kroner ($ 806 million)in the first quarter of 2012 compared to a loss of 1.2 billion Kroner in the corresponding quarter last year. This dragged down Telenor's global numbers as the company reported a net loss of 390 million Kroner in the quarter, after a profit of 3 billion kroner a year ago as it wrote off the value of its Indian Uninor unit due to the risk of the firm losing its licence.
Not surprisingly, Telenor excluded India from its 2012 forecasts for the first time after licensing problems led to massive write downs.
The company's revenues from Indian, however, almost doubled from 548 million Kroner to little over a billion kroner. The number of mobile subscribers increased by 3.2 million during the quarter taking the total subscription base up to 31.5 million. As a result, the EBITDA loss improved to 622 million kroner compared to 1 billion kroner last year.
Mr Richard Aa, Group CFO, Telenor Group said that 2.3 per cent of the 8 per cent organic revenue growth of Telenor Group has come from India. So India is contributing around two-thrid of Telenor Group's organic revenue growth. Highest EBITDA improvement for Telenor Group worldwide is coming from India.
Despite the Supreme Court cancelling its licences, the company made an investment of 142 million kroner on beefing up existing network. But the number of sites was reduced by 109 to 27,863 towers.
Strong customer uptake
Mr Fredrik Baksaas, President and CEO, Telenor Group, said, “Uninor in India continues to demonstrate operating performance on track towards communicated targets. The strong customer uptake continues, and by the end of March, more than 30 million customers were connected to Uninor's network. We are impressed by the Uninor employees' ability to deliver at this level under the present circumstances.” Telenor has a majority stake in Uninor and has been fighting to stay invested in India although the Norwegian major has written off the Indian business.
Mr Baksaas added that the recent recommendation from the regulator on spectrum auction has severe negative impact on both the telecom industry in India and Uninor. “What we do from here onwards in India has to follow a business case,” he said.