Not worried by 2G spectrum allocation row: Telenor

Q: Does Telenor have plans to hike its stake to 74% in the joint venture (JV)?

A: Not from where we are today. The project is described as 67-33% cooperation between the two partners and that is where we stay for the time being.

Q: What is your own view of this per second billing and this extremely cutthroat pricing that's prevalent in the market now?

A: The transition from per minute taxation to per second taxation is basically a step that was taken in European markets in the 90s and it comes as a major shift in the industry. But when the shift is done, competition will after a while normalize.

Q: Would you indulge in this kind of pricing?

A: It will see Telenor companies, not necessarily bring the price lead in the markets in which we operate. But any operator needs to put forward a price propositions together with the presence and promotion up against the markets to which we are to address. In that sense, our overall service offering will consist of both price and presence the way we now launch in India.

Q: How long are you going to wait till you make money? What kind of internal targets you have in mind?

A: Around three years before you can see EBITDA positive figures and even two more years before you can see cash flow breaking even.

Q: Given the current environment of the Indian telecom story is playing out with 11 operators, pricing wars and so on - do you expect consolidation?

A: When the last licenses were distributed in Q1 2008, there was also a specific regulatory mechanism around this that consolidation could only happen after three-years. If regulation develops in such a way, that regulations would be encouraged and adapted. Also, Telenor through Uninor would be an active part in looking for both kinds of potential business proposals that might come forward in such a consolidation type of environment.

Q: So you are saying in 2-3 years time you would actually look at potential acquisitions within the Indian telecom space?

A: Consolidation can take the form of combinations or merger and acquisitions (M&A). In that sense, how a consolidation takes place is not addressed in this case and at this point of time.

Q: What is your view on the 3G spectrum auction that is impending? Would you be participating in them?

A: Since we are starting up - we don't have an ambition to participate in a 3G nationwide auction principal type of milestone. But on the other hand we will take a look at what kind of selective approach we could have through 3G, pending, whether the auction mechanism will allow that.

Q: Are you happy with your partner right now?

A: The way the partnership has developed towards the launch and in the practical work we had through 2009 has been excellent.

Q: So you are not too concerned about the controversy surrounding Untiech, the earlier 2G auctions, that there was CBI probe etc - that doesn't affect you?

A: As I understand it the investigation has been directed towards a number of operators that got licenses at the beginning of 2008 long before Telenor entered the scene. We have, from that perspective, cooperated with various governmental institutions that want to check into this in a proper manner and disclose what there is and after that no further responses have been received.