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Source claims Norwegian-based telco may struggle to strike a deal in wake of spectrum auction.
Telenor has held talks to sell its Indian operation to local rival Idea Cellular, it emerged on Friday, but the Norwegian incumbent may struggle to exit the market in the wake of this year’s spectrum auction.
A source cited in an Economic Times report claimed the two companies have held negotiations for a transfer of assets and liabilities without a cash element.
However, another source said the negotiations might not lead anywhere because Idea may not want to increase its debt, which was further added to in October’s spectrum auction.
Doubts have been mounting about Telenor’s continued presence in India ever since CEO Sigve Brekke indicated during the telco’s first quarter results call in April that the company would consider alternative options if securing more spectrum proved impossible.
An ET report in early July claimed that Vodafone India was interested in acquiring Telenor for its spectrum.
Later that same month, Telenor ramped up the speculation further when it announced it would not take part in October’s frequency auction, citing high prices. The company said at the time that it was evaluating its options with regard to India.
However, despite Telenor’s possible eagerness to exit India, the company might struggle to attract a suitor.
According to the ET’s sources on Friday, most of Telenor’s rivals consolidated their spectrum holdings in the auction.
"As a result, none of the big telcos may want to buy any more airwaves for the time being," said one of the sources, in the report.
