Developments in the telecom sector over the last two years are making foreign investors take a hard look at their operations in India.
Bahrain Telecommunications called it quits on Wednesday.
But two others — UAE’s Emirates Telecommunication Corp Ltd (Etisalat) and Norway’s Telenor — have decided to hang on, even if it means taking a hard hit by way of write-downs.
Telenor, which entered India through a partnership with real estate firm Unitech in 2009, made a provision of $721 million last week as impairment loss for its Indian operation.
And on Thursday, Gulf mobile service provider Estisalat followed suit by taking a $827 million charge against its Indian business.
The two carriers are visibly jittery over the Indian market though they have expressed their seriousness to continue doing business in the country.
However, SSTL’s Russian partner, Sistema, which has invested over $3.1 billion in the Indian ventures till now and thus has a lot more at stake, has done no such thing.
A spokesperson for Sistema said its immediate plan was to file a review petition.
Asked if it would write down costs on India operation, he said the company had yet to take a call on that.
As for participation in the rebid of spectrum released from the cancellation of 122 licences, the spokesman said it would depend on the terms and condition and base price set by the government.
“You can gauge our intent to be in India from the aggressive tariff plan that we have come out with today (Thursday),” he said.
One of the reasons Sistema is still not ready to down shutters in India is that its business here has been growing at a healthy pace.
For instance, in the quarter ended September, its average revenue per user increased to Rs85 from Rs82 in the previous quarter, defying the declining market. Its wireless subscriber base grew 13% to 13.27 million and data card subscriber base by 30% to 1.07 million.
The company is expected to come out with its December quarter results in March.
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