Courtesy Gadgets Now

NEW DELHI: Telenor is said to have held talks with Idea Cellular for a cash-less sale of its India unit, which would entail the country’s No. 3 mobile phone company taking over all the liabilities of the Norwegian telecom operator’s local business.

“The two companies have held negotiations for a transfer of all liabilities and assets without an actual payout,” a person familiar with the development told ET.

Another person said the talks may not lead to a deal because Idea may not want to add to its debt of over Rs 36,000 crore, having bought additional spectrum in the October auction for almost Rs 13,000 crore.

Telenor India owes close to Rs 1,900 crore to the government in deferred spectrum payments and about Rs 1,800 crore to financial institutions as debt, as per the latest available figures. Idea Cellular didn’t respond to an emailed request for comment.

Telenor said it does not comment on market rumours and speculation. An acquisition would help Idea gain 4G spectrum in the 1800 MHz band, especially in some key circles, while Telenor would be able to exit the Indian market, a senior industry executive said.

UP West, Gujarat and Maharashtra are three of Telenor’s seven circles in which Idea is ranked first or second. Telenor has spectrum in UP West, UP East, Bihar & Jharkhand, Maharashtra, Andhra Pradesh, Assam and Gujarat.

Telenor has marked down the value of its India business by almost Rs 5,000 crore since the beginning of 2016 – the write-down of the value of its licences alone was over Rs 4,000 crore – and didn’t participate in the October spectrum auction, signalling its intent to leave a market where it has made losses and struggled to expand.

The company has been looking for potential buyers and reported talks with UK’s Vodafone Group Plc stalled before the auction due to differences over valuation.

 What has complicated matters further for Telenor is that all the major Indian operators consolidated their spectrum footprint at the most recent auction, said the person aware of the discussions between the two sides. “As a result, none of the big telcos may want to buy any more airwaves for the time being.”
Idea increased its spectrum holding by 349.2 MHz in the recent sale, which managing director Himanshu Kapania said was the largest purchase of airwaves by the company, as it bid to close the 4G bandwidth gap with market leader Bharti Airtel and newcomer Reliance Jio Infocomm.
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