Nov 19, 2010
India, a Paradise or Battlefield for Mobile Carriers?
Do you like this story?
India, a Paradise or Battlefield for Mobile Carriers?
India has been a popular destination for global telecom operators
seeking new sources of growth outside their saturated home markets. But
in the latest indication that challenges remain in this market,
Norwegian telecommunications operator Telenor said its Indian operation
is only likely to generate positive cash flow from 2014.
Telenor, which has presence in markets such as Pakistan, Bangladesh,
Thailand and Malaysia, entered the Indian market late last year and now
ranks seventh by the number of subscribers.
India’s less than 30 percent mobile penetration rate has attracted
many foreign telecom operators to the country. And yet, even the
country’s biggest mobile-phone operator by users, Bharti Airtel, is
looking beyond its home market for growth because of a fierce tariff war
and stalled revenue growth.
While Telenor’s head of Asia, Sigve Brekke, said he is optimistic
about growth in India, he remained tight lipped on the time frame for
when the firm might make a profit on a net basis from the country.
“India is the most competitive (telecom) market in Asia. Tough
competition makes the price very low. In order to make a profit, we have
to build up our business scale, expand our distribution channel and
implement a cost-efficient business model and dynamic pricing,” Mr.
Brekke said in an interview in Hong Kong.
Regulatory uncertainties are also clouding the outlook for Telenor’s Indian operations.
Mr. Brekke said India’s government is proposing some new rules on
mergers and acquisitions and spectrum allocation which make planning for
the future more difficult.
Telenor received operating licenses for 22 regions in India but it only received spectrum for 21 regions, said the executive.
The missing piece is New Delhi, the largest metropolis by area in
India. He said the company is applying for spectrum in Delhi and it
hopes to get the spectrum as soon as possible.
But India’s telecom regulator Thursday proposed canceling 62
licenses of five telecom operators, including the Indian joint venture
of Telenor as a new crisis looms in a sector that has seen its minister recently resign over allegations he mishandled the allocation of spectrum to new players in January 2008.
Telenor’s Indian unit, Uninor, which launched operations late last
year, posted an operating loss of NOK1.13 billion (US$185.7 million) in
the third quarter. The company has launched telecom services in 13
regions in India and it is on its way to roll out its network to the
rest, he said.
Despite difficulties, Mr. Brekke says he’s not giving up on India.
Subscribe to:
Post Comments (Atom)
0 Responses to “India, a Paradise or Battlefield for Mobile Carriers?”
Post a Comment