Telenor posts profit drop after India difficulties
OSLO: Norwegian telecom giant Telenor posted a sharp profit fall for 2011 after taking a charge of 4.2 billion kroner on its Indian unit after New Delhi scrapped mobile licences in a massive fraud probe.
Net profit in 2011 fell 44.6 percent from the level a year earlier to 7.9 billion kroner in large part due to complications from its majority stake in Indian company Uninor.
India’s Supreme Court last week cancelled second-generation (2G) mobile licences issued in 2008 to a host of companies with foreign partners on the grounds the sale was rigged, costing the government some $40 billion in lost revenues.
Telenor entered what is now the world’s second-biggest telecom market in 2009, taking a 67.25 percent stake in Uninor which holds 22 of the 122 licences cancelled by the Supreme Court.
“We are working to protect our investments in all possible manners, and will consider every option prior to any further investments,” Telenor Chief Executive Jon Fredrik Baksaas said in a statement.
“We expect Indian authorities to conduct a swift and fair process,” he added.
Telenor, like many top companies, considered Asia a major focus, generating growth and profits way beyond more mature developed country markets.
Despite its difficulties in Asia, Telenor said earnings would improve slightly in 2012.
The company said it expected sales excluding acquisitions to grow above 5.0 percent in 2012 with operating profit margins of between 32 and 33 percent