Uninor to scale-down operations in Karnataka, three other states

 The management of Uninor, a mobile service operator which is 67 per cent owned by Norway’s Telenor Group, announced on Tuesday that in light of the continuing uncertainty around the auctions of telecom spectrum it has decided to go for a   gradual scale-down of operations in Karnataka, Tamil Nadu, Kerala and Orissa circles.

The company will give all its existing customers in these four circles a 30 day notice before any network scale down is expected to begin. However, the company will stop acquiring any new subscriber in these four circles, where it has 6.8 million subscribers, with immediate effect. The company also announced that it will focus its resources in strengthening nine of its 13 commercially active circles, such as, UP East, UP West, Bihar & Jharkhand, Kolkata, West Bengal, Andhra Pradesh, Mumbai, Maharashtra & Goa and Gujarat.

“This will place the company in a stronger financial and operational position to enter the auctions,” said a Uninor release. The company will maintain a smaller network and remain operational in the four affected circles, including Karnataka. Uninor, which has invested Rs 6,135 crore in India, has faced an uncertain environment that also affected its  ability to secure operational funding, company said. With lack of clarity around the auctions continuing, the company is now forced to take stronger steps to ensure optimal fund utilisation.

“Since the Supreme Court order, we have pursued every possible measure to take our business forward in its current form. However, we are now forced to take this difficult but necessary decision,” said Uninor Managing Director Sigve Brekke. “Our plan now is to enter the auctions with a very strong presence in the nine circles, auction rules permitting,” he added.

The company is expected to lay off 400 employees and close down 1,500 distributors in India.