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Telenor's game plan for Indian market
By siliconindia
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Thursday, 08 October 2009, 19:31 IST |
2 Comments
Geneva: Norwegian telecom firm Telenor is set to roll out pan-India operations by year end under the brand UniNor, and also states that the ongoing tariff war in the country is hardly surprising. This has factored in losses amounting to 
15,000 crore in its first five years of operations, reports Economic Times.
"It is no surprise that there is a price war in the Indian market. Tariff wars happen when telecom penetration goes up from 30 percent to over 40 percent. We are structuring our operations in such a way that our core earnings like earnings before interest, taxes, depreciation and amortization break even in three years. We are targeting an operating cash flow breakeven in about five years from the launch," said Fredrick Baksaas, President and CEO, Telenor Group.
"India is a large country, and it is a continent by itself and we are targeting profits in five years from there. Even in Norway, Telenor's home market, it took seven years to break even," Baksaas added. The company's operations in India will be done through Unitech Wireless, in which it holds a 67.25 percent stake. Telenor bought 60 percent in Unitech Wireless for 6,120 crore in October 2008.
Telenor has operations in 13 countries and has around 170 million users. The company had also reduced its capital expenditure in 2009 by 30 percent.
The company will invest 2,500-3,200 crore in India in FY09, against the earlier planned investment of 4,600 crore. Baksaas claimed that the mobile network which it will launch in India is the most economical one compared to the company's operations in other markets.
"The Indian business model is different. This is the cheapest network that we will deploy," said Baksaas adding that the company would go all out to make itself visible in the crowded Indian market by offering higher quality of service.
Telenor's Indian arm has signed various agreements; it has inked deal with tower company Tata-Quippo for sharing the infrastructure, has entered an agreement with Wipro to manage its IT services and has awarded contracts for network equipment in eight telecom circles to Alcatel-Lucent, Huawei and Ericsson and Nokia Siemens Networks.
New players like Datacom, Loop, STel, Sistema-Shyam and Swan are lining up to challenge the existing pan-India mobile operators like Bharti Airtel, Reliance Communications (RCom) and Vodafone Essar.
15,000 crore in its first five years of operations, reports Economic Times.
"It is no surprise that there is a price war in the Indian market. Tariff wars happen when telecom penetration goes up from 30 percent to over 40 percent. We are structuring our operations in such a way that our core earnings like earnings before interest, taxes, depreciation and amortization break even in three years. We are targeting an operating cash flow breakeven in about five years from the launch," said Fredrick Baksaas, President and CEO, Telenor Group.
"India is a large country, and it is a continent by itself and we are targeting profits in five years from there. Even in Norway, Telenor's home market, it took seven years to break even," Baksaas added. The company's operations in India will be done through Unitech Wireless, in which it holds a 67.25 percent stake. Telenor bought 60 percent in Unitech Wireless for 6,120 crore in October 2008.
Telenor has operations in 13 countries and has around 170 million users. The company had also reduced its capital expenditure in 2009 by 30 percent.
The company will invest 2,500-3,200 crore in India in FY09, against the earlier planned investment of 4,600 crore. Baksaas claimed that the mobile network which it will launch in India is the most economical one compared to the company's operations in other markets.
"The Indian business model is different. This is the cheapest network that we will deploy," said Baksaas adding that the company would go all out to make itself visible in the crowded Indian market by offering higher quality of service.
Telenor's Indian arm has signed various agreements; it has inked deal with tower company Tata-Quippo for sharing the infrastructure, has entered an agreement with Wipro to manage its IT services and has awarded contracts for network equipment in eight telecom circles to Alcatel-Lucent, Huawei and Ericsson and Nokia Siemens Networks.
New players like Datacom, Loop, STel, Sistema-Shyam and Swan are lining up to challenge the existing pan-India mobile operators like Bharti Airtel, Reliance Communications (RCom) and Vodafone Essar.
