Unitech given deadline for Uninor decision

15 March 2012 |


Unitech Wireless has been told to buy out or sell out of Indian operator, Uninor, by March 19.

The decision by India’s Company Law Board (CLB) comes following an intense argument between Unitech and Telenor after Uninor’s 2G licences were cancelled in the wake of India’s 2G auction scandal. The CLB hopes that the deadline will determine Uninor’s future before its licences expire in three months.

Unitech’s relationship with Telenor soured following the cancellation of Uninor’s 2G mobile licenses at the beginning of February. A total of 122 2G licences were cancelled by the Indian Supreme Court, which deemed the 2008 2G auction process to have been “totally arbitrary and unconstitutional”.

Telenor issued a notice on February 15 stating that it holds Unitech liable for breach of warranty related to the cancellations of the licences and is seeking indemnity and compensation for all investment, guarantees and damages cause by the Supreme Court order.

Since then Telenor has been seeking a new partner in India, with the intention of migrating Uninor’s core customers, 17,500 workforce and business partners.

Telenor has invested an estimated $1.24 billion in Uninor, on top of $1.63 billion in guarantees of short term debt. With such a large investment, exiting the Indian market in the wake of the scandal was not an option.

Both Batelco and Etisalat decided to up and leave their Indian operations, following the Supreme Court’s decision.

The re-auction process of the 122 licences was intended to begin three months after the Supreme Court’s decision, but since then doubts have emerged that this timeframe is realistic. The Indian government recently sought to clarify the Supreme Court’s decision, after the telecoms ministry said that it could take up to 400 days for the process to be completed.