Telenor seeks $14 billion payback from India license fight

Reuters

Norwegian mobile operator Telenor ASA has told the Indian government it wanted to resolve its license dispute, but said it would seek damages if the cancellation of its 22 licenses was not settled.


"We are hopeful that it remains the government's intent to protect and encourage bona fide foreign investment in the country," Telenor (fornebu, Norway) spokesman Glenn Mandelid said in an emailed statement.


He said Telenor did not state a specific compensation amount in its letter to New Delhi, but plans to seek compensation for "all investment, guarantees and damages." The Times of India reported on Tuesday Telenor was seeking nearly $14 billion in damages.


Telenor wants a solution within six months or will seek international arbitration for failure to protect its investment in the country, the newspaper said, citing the notice it said was sent to the prime minister's office as well as to the telecoms and corporate affairs ministries.


India's Supreme Court in early February ordered the revocation of all 122 mobile licenses awarded in a scandal-tainted 2008 sale to be revoked in four months. The order covered 22 licenses for Telenor's local joint venture.


Telenor said it informed the Indian government of its "intent to invoke" the provisions of the so-called Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore. The Norwegian company owns the stake in the Indian joint venture through its unit registered in Singapore.


Telenor, which bought into its Indian venture after the licenses had been awarded, has said it has been "unfairly harmed" by the court order. It has filed a petition in India's Supreme Court seeking a review of the order, while the Norwegian government is also lobbying for the state-backed company.


Telenor's notice comes after Russian conglomerate Sistema last month asked India to settle within six month a fight over the court order to revoke 21 licenses held by its local unit, citing a bilateral pact between India and Russia.


Indian government spokesmen were not immediately available for comment.


Telenor paid about $1.2 billion for a 67.25% stake in its Indian unit and has guaranteed bank loans for the venture. The company says it has invested about $2.7 billion in India.


The joint venture, which operates under the Uninor brand name, has been the most aggressive of the newer telecom companies in the fiercely-competitive Indian market. Uninor ranks eighth in the market of 15, with 41 million customers as of February.


Telenor has also been embroiled in a dispute with its Indian partner, Unitech Ltd. Telenor has accused Unitech of "fraud and misrepresentation" after the license cancellation order and has said it would seek to migrate the business to a fresh venture with a new partner.


 (Reporting by Devidutta Tripathy and Sumeet Chatterjee; Editing by Ranjit Gangadharan and Matt Driskill)

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