Norway's Telenor group has decided to leave the Indian telecom market amid growing pressure after Reliance Jio's entry. The group will sell its business with a customer base of 4.4 crores to Bharti Airtel.
"After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return," Sigve Brekke, CEO of the Telenor Group, said.
Airtel will buy Telenor's India operations in seven circles - Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West) and Assam.
"The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall customer base and network. It will also enable Airtel to further bolster its strong spectrum foot-print in these seven circles, with the addition of 43.4 MHz spectrum in the 1800 MHz band," Airtel said in a statement.
Telenor's exit comes amid unprecedented disruption in the telecom sector with Reliance Jio's power play causing a situation of possible big mergers in the industry.
Idea Cellular and Vodafone India are reportedly looking to seal their proposed merger within a month. The merged entity of Vodafone-Idea has potential to emerge as the market leader in terms of wireless subscribers.
Vodafone and Idea are in the second and third spot currently, while Bharti Airtel is number one. Top five service providers have over 80 per cent of the market share of the total broadband subscribers. Vodafone-Idea entity would become the leader in the category, overtaking Bharti and Reliance Jio.
Meanwhile, recent reports said Reliance Group Chairman Anil Ambani has met the newly appointed Tata Sons Chairman N Chandrasekaran to talk about the possible merger of Reliance Communications with the Tata Group.
The impact of Reliance Jio aside, Telenor's decision to sell its business in India does not come as a surprise because the company had hinted at exiting the Indian market in April last year after it posted a huge operating loss of Rs 2,530 crore.
Telenor global CEO Sigve Brekke had then said: "Long terms presence in India is dependent on our ability to secure additional spectrum. We are not able to compete with current spectrum portfolio we have in growing data market."
"We are looking at upcoming auctions and also looking at potential trading options... Need to be pragmatic to consider other alternatives if that turns out not to be a possible to find value focused solutions. We are looking at all sustainable business model option," Brekke had added.
Telenor CFO Morten Karlsen Sorby had said: "We are in India to make money, if we don't see return then we need to look at other alternatives".