Telenor pays a third of Indian licensing fee in protest: report

Norwegian telecoms incumbent Telenor is paying a third of the fee for its Indian spectrum licenses in protest, according to a report in India’s Economic Times newspaper.

Unlike other bidders that won back licenses revoked by India’s Supreme Court earlier this year, Telenor (Fornebu, Norway) has not been allowed to deduct original market-entry fees from its payments.

Those entry fees were paid in 2008 when the companies won spectrum in a process later judged to have been fraught with corruption by Indian authorities.

Norwegian telecoms incumbent Telenor is paying a third of the fee for its Indian spectrum licenses in protest, according to a report in India’s Economic Times newspaper.

Unlike other bidders that won back licenses revoked by India’s Supreme Court earlier this year, Telenor (Fornebu, Norway) has not been allowed to deduct original market-entry fees from its payments.

Those entry fees were paid in 2008 when the companies won spectrum in a process later judged to have been fraught with corruption by Indian authorities.

But while other companies have continued to operate as normal, Telenor decided to scrap its Uninor business – having fallen out with joint-venture partner Unitech (Gurgaon, India) – and re-enter the market through a new entity called Telewings Communications, in partnership with Indian investor Sudbir Valia.

Authorities appear to have taken the view that Telenor does not qualify for the offset because the entity awarded market-entry permits in 2008 is not the same as the one that recently won licenses in six Indian circles.

License winners have been allowed to pay a third of the bid amount immediately and the rest in ten equal instalments.

Telenor must have hoped its fee of INR40.2 billion ($737 million) would fall to INR23.62 billion after subtracting the market-entry fees paid by Unitech in 2008.

That would presumably have made it liable for an upfront payment of INR7.8 billion, instead of the INR13.25 billion it is being forced to cough up.

According to the Economic Times, license fees owed by Videocon (Gurgaon, India) and Idea Cellular (Mumbai, India) – two other operators that won back concessions – have been completely offset by the market-entry payments the companies made in 2008.

Excluding the sum paid by Telenor, the licensing process has raised just INR3.8 billion for government coffers this fiscal year.