Telenor is starting to build scale in India, despite the fact that it does not have enough spectrum, according to new group CEO Sigve Brekke, who on Wednesday committed to staying in the country, but insisted his company will not make any major M&A moves there.
"We are going to stay in India for the long term," Brekke said on Telenor’s third quarter results call on Wednesday.
However, "we are going to have a very prudent approach," he said. "We are not making any big acquisitions."
There have been numerous rumours about Telenor’s involvement in M&A activity in India this year. The telco was linked with smaller rival Videocon in May and with Tata Teleservices in March.
It is not immediately clear whether either of those options would constitute a big acquisition. Sources quoted by the Economic Times said Videocon values itself at around 100 billion rupees (€1.37 billion) including debt.
Meanwhile, the Tata deal was reportedly centred on the creation of a joint venture with Telenor as the dominant partner. The Business Standard predicted an announcement following the spectrum auction that took place earlier this year, but no announcement came, despite the fact that Telenor did not secure any airwaves in the sale, while Tata did.
On Wednesday Brekke noted that the 2015 auction was more about operators renewing their existing spectrum holdings in India, whereas "the real auction" of airwaves in the 2.1 GHz and 2.3 GHz bands is due to take place in early 2016.
"There is spectrum enough in these two bands for us to be having a chance to take a position," he said.
"We need more spectrum," Brekke said, adding that Telenor is reviewing its options as to how best to achieve that. With spectrum sharing now a possibility, "we are talking to several of the industry players," he said.
"Despite not having enough spectrum," 22% of Telenor’s customers in India are now active data users, and that number is only set to rise, Brekke said.
The telco added 1 million mobile customers in Q3, taking its total to 40.86 million, up 19% on the previous year.
It increased revenue to 1.41 billion kroner (€150 million) from NOK1.07 billion in Q3 last year, and its EBITDA loss narrowed to NOK58 million from NOK136 million.
However, its operating loss widened to NOK373 million from NOK195 million.
"We are starting to get scale," in India, Brekke said.
