Telenor to concentrate on six circles, break even by next yr

Written by fe Bureau | New Delhi | Updated: Nov 30 2012, 09:24am hrs
Norwegian telecom operator Telenor plans to break-even in all of its six telecom circles by next year. Addressing the companys first press briefing after it won back spectrum in six of the total 22 circles, its global CEO Jon-Fredrik Baksaas, however, refused to comment on news reports of it being in talks with Tata Teleservices for a possible merger of its India operations. These are mere rumours and we dont comment on market speculations, he said playing down the news.

Baksaas said the company would focus on the six circles where it won spectrum in the recent auctions and where it has a customer base of about 30 million. He clearly ruled out any near future plans of the company becoming a pan-India telecom operator. Pan-India operations is no longer a practical thing. Its better to stay profitable in a more concentrated geography than to look at the potential losses in a bigger geography, he said. Baksaas said he was happy to report that the company had achieved an Ebidta break even in the UP (E) circle while it was all set to report a cash flow break even across its India operations by next year.

Further, explaining the companys decision to downsize its operations, he reeled out statistics to explain how the six circles account for 50% of Indias population and there are 95 mid-size cities in these circles that have grown at an average of 37% over the past decade.

Interestingly, Baksaas said low tariffs would continue to be the cornerstone of the companys business strategy. The news would surely dismay incumbent operators like Bharti Airtel and Vodafone, who have raised their pitch for hiking the pathetically low tariffs in the country.

Elaborating on the pricing strategy Baksaas said that his company would go on wooing subscribers through low tariffs. Low tariff environment isnt over yet, Baksaas said.

The company has not yet decided on the new brand name, if any, under which Telewings will operate after all business and assets are transferred to it from Uninor. Baksaas said the transfer of assets from Uninor to Telewings will start after formalities related to new licences are completed.