Telenor to invest $1b in India

Telenor has entered India through a joint venture with Unitech Ltd. It has so far invested $500 million in the JV for the 49 per cent stake and will soon bring in another $ 500 million to raise its stake in the JV to 67 pc. Briefing reporters, Telenor Group President and CEO Jon Fredrik Baksaas said “all the money that we are bringing in will be fully invested for the operations of the company.”

The Rs 92,000 crore Telenor group already operates in four Asian markets, namely, Pakistan, Bangladesh, Thailand & Malayasia and India will be the fifth Asian country for the company. It has more than 172 mobile subscribers under its fold, of which 72 million come from Asia.   

Explaining why Telenor is bullish on India even though competition is intense and average earnings per subscriber is falling rapidly, Baksaas said since  mobile penetration in the country is still low and market share is fragmanted, there is scope for new players. But Telenor is aware of the challenges here, hoping to reach a cash breakeven point only after five years, Baksaas said.

Telenor Group Executive Vice President & Head of Asia Region Sigve Brekke pointed out that in every country the market leader has 40 per cent or more share of the market and the top two players together occupy around 80 per cent of the market. On the contrary, the market share of largest player in India , Bharti Group, is just 25 per cent and rest is highly fragmanted among dozen odd players. “We see a great scope of consolidation here,” said Brekke.

Telenor’s go to market strategy, Brekke explained, will be three pronged— build strong brand name, value added service and  price and go for widest possible distribution network.