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India lets Telenor offset bandwidth payments

Government reverses its stance and allows the telco use the US$302 million it paid for earlier licenses in 2008 to offset the cost of new airwaves it won in the November 2012 auction.
Written by Jamie Yap, Contributor

The Indian government has allowed Norwegian telco Telenor to reclaim INR 16.58 billion (US$302.6 million) paid for its previous mobile permits that were controversially revoked in the country's 2G spectrum saga, and use that money to offset the cost of new airwaves it won in the November spectrum auction last year.

Telenor won back mobile permits in six telecom circles in the November auction for INR 40.18 billion (US$733 million), after it had lost all 22 of its former licenses in February 2012, Reuters reported Thursday. Telenor was among the various telcos affected when the Indian Supreme Court revoked all 122 licenses on grounds of alleged government graft, and ordered the permits be put back up for bidding.


The government's decision is a reversal of its earlier stance on Telenor. It allowed other carriers to offset their previous license fee against the new auction payments, but not Telenor because it had bid in the auction under a new joint venture (JV) called Telewings Communications, different from the entity which paid the earlier fee in 2008.

Telenor was previously the majority owner in a JV called Uninor with India's Unitech. After Uninor's 22 permits were revoked, Telenor decided to auction off Uninor's assets, and scrap the joint venture in order to form a new company to bid for new licenses.

"It was a just technical issue, only because the legal entities were different," a government official said, adding that the ministerial panel on Wednesday decided to allow Telenor the offset, Reuters reported.

The telecoms department (DoT) at first rejected Telenor's request to adjust the 2008 license fee against the cost of airwaves won at November 2012 auctions, according to a separate report by the Economic Times. Telenor has paid about a third, or 33 percent, of its bid price "under protest" last December, the report said.

According to Reuters, Telenor will pay the remainder in installments after a two-year moratorium. The government official said the company will be allowed the US$302 million offset against the remainder of the auction payments.

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