Telenor says ‘no’ to upcoming spectrum auction in India

telenor-indiaTelenor, the Norway-based telecom operator, said it has decided against participating in the upcoming telecom auctions in India as the reserve prices are too high compared to the possible return on investment.

“We have, after thorough consideration, decided not to participate in the upcoming spectrum auction, as we believe the proposed spectrum prices do not give an acceptable level of return.

“We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on capex,” it said today.

Telenor had asked the government to set apart at least one block of 700 MHz LTE spectrum for rural broadband and have a low reserve price for the same. The suggestion was rejected by the TRAI.

It is the only operator in India to try narrow-band LTE, which uses 3 or 1.4 MHz of spectrum compared to the regular 5 MHz.

The company saw a marked improvement in its Indian business during the quarter, but continue to see net outflows due to capex requirements.

Telenor’s Indian operation added 0.8 million subscriptions during the second quarter. At the end of the quarter, the subscription base was 13% higher than the same quarter last year.

An average telenor customer spent just Rs 93 per month, down by about Rs 2 compared to a year ago.

“The decline was primarily driven by lower voice consumption, partly compensated by increased data usage,” the company said.

Revenues in local currency increased by 13% compared to the same quarter last year. Subscription and traffic revenues in local currency increased by 12%.

The EBITDA improved significantly as result of the revenue growth and positive effects from the ongoing network modernisation programme, including one-off positive impact of NOK 32 million related to reconciliation with various vendors, the company said.