New 2G auction must have only newcomers participate: Uninor

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New 2G auction must have only newcomers participate: Uninor

On the fallout of the Supreme Court order on the 2G licence cancellations, Uninor, the joint venture between Telenor of Norway and Unitech has said it is not ready to give up without a fight.

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Excerpts from After the Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about Unitech See previous management interviews See what other Experts & Brokerages are saying about Unitech Unitech BSE | NSE 25/05/12 Are Mutual Funds betting on Unitech?

On the fallout of the Supreme Court order on the 2G licence cancellations, Uninor, the joint venture between Telenor of Norway and Unitech has said it is not ready to give up without a fight. Uninor's managing director Sigve Brekke spoke to CNBC-TV18's Shereen Bhan to clarify Uninor's future in the Indian telecom market.

Below is an edited transcript. Watch the accompanying video for more.

Q: You have had trouble with your joint venture partner - the two of you went to court, you had trouble with the authorities that have question marks on your operations in Pakistan and Bangladesh and whether that compromises operations here in India from a national security point of view. You now have the Supreme Court saying that your license stands cancelled and quashed. Why don't you cut your losses and exit India?

A: We decided to invest in India for one reason only and that was that we saw some fundamental opportunities in this market. We saw a huge country with a relatively low penetration. We saw a young population and a lot of kids coming into a mobile mandatory age and we saw an economy growing. These were the fundamentals we invested on and these fundamentals have not gone away and we have always been looking at a long-term window.

We are not a short-term investor that takes gains and run home. We look at 10-15 years and we are used to being long-term and we are used to see beyond a kind of short-term troubles that's why we are still here.

Q: How real is the exit possibility at this point of time because the challenges and the obstacles in your path are only going to mount? If you do want to continue your operations here in India, you will have to go through another auction process, which means you are going to have to dish out a lot more money. Even from a national security point of view if you look at what Subramanian Swamy and what several other people have to allege, in a court of law they have claimed that because of your operations in Pakistan and Bangladesh, Norway's Telenor should not be welcomed here in India to business?

A: We have invested Rs 14,000 crore into our operation. We have done that because we are trying to fulfill our part of the deal. We have been fulfilling all obligations that the Government of India has asked us to fulfill and we brought that up to a customer base of almost 40 million customers and we haven't done anything wrong. We have complied with everything that the government has asked us to comply with and we have even asked the government to increase our stake. We went to the government and said that we need an FIPB approval to increase our stake from 49% to 67% of the nine month scrutiny of our investment and we got that.

Now we have gone to the government again and said that we would like to increase it to 74% and this is just to show the government that we are here for a long stay. We are an absolutely transparent company. We are complying with all laws and regulations. So, this is what we are now are going to discuss with the government moving forward also. We are now being a victim. We didn't do anything wrong.

Q: Your relationship with your JV partner Unitech has been on the rocks for a very long now. You have taken the matter to court as well. If the TRAI or the government as far as the auction process is concerned were to say that those charge sheeted promoters who are being tried in a court of law in the 2G trial should not be eligible. Are you looking at the possibility of a divorce at this point in time?

A: I must say that those partner differences that you are referring to that is still way down on my priority list right now. The top priority right now is to secure the Rs 14,000 crore investments, to maintain our customer base and to try to get into a dialogue with the government on finding a solution to the situation that we have been put in.

Q: If the rules - once the government does clarify then suggests that someone who is actually been charge sheeted in the 2G trial case for criminal conspiracy should not be eligible to bid for the 2G auction process, will you divorce this partner and look for another Indian partner?

A: There were a lot of 'ifs' and 'buts' in your question. I cannot go into speculation. This is part of the dialogue we need to have with the government now where they are clarifying what to do with the current problem and we will entertain that discussion with the government.

Q: Would it not make sense to go in for a divorce because you are dealing with a company where the promoter is currently under trail in the 2G trial court? Would it not make for a clean break for you to start afresh in India - if you are serious about being a long-term telecom player here?

A: Now we need to have our priorities straighter and the first priority is to secure our investment. I am talking about Telenor's investment. The Rs 14,000 crore is Telenor's exposure to India and secondly we need to clarify what will be the rules for the new license awardees.

On that score we need to engage the government in the discussion to find a solution. Then they have to take a one-on-one step to find out how are we going to move ourselves to prepare for that future. I cannot answer all these hypothetical questions.

Q: When are you likely to file your review because you have said that you are exploring all legal options and legal recourse available to you? What will be the grounds for your review petition?

A: There are two-three things we can do now. One is the legal option and under review is one of those legal options. Our lawyers are now working to analyse all the different options and we need some more time to make a decision on that. At the same time, we need this dialogue with the government and that's what I urgently want the government also to acknowledge. We have already started to set up meetings with government representatives because we need to find a solution on how are we going to be able to continue to do what we came here to do.

Q: What are you hoping that the Norwegian government can negotiate with the Indian government? What is the brief that you have given to the Norwegian government for their conversations with the Indian government?

A: That you need to ask the Norwegian government. What I can say is we are in close dialogue with the Norwegian government.