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TELENOR

Norway’s Telenor sells out of India as tycoon weighs in

Indian telecom giant Bharti Airtel will buy the local operations of Norway's Telenor, it said Thursday, as the ultra-competitive mobile market is shaken up by the country's richest man.

Norway's Telenor sells out of India as tycoon weighs in
Former Telenor CEO launching the company's ill-fated India business in 2009. Photo: peerdahl/Wikimedia Commons
Tycoon Mukesh Ambani launched Reliance Jio's 4G network in September with an audacious free service for the rest of 2016, followed by vastly cheaper data plans and free voice calls for life.
 
The move forced rivals to slash their tariffs and scramble to match the deep pockets of Jio, which is backed by Ambani's vast energy-to-chemicals conglomerate Reliance Industries and picked up 100 million subscribers in its first six months
   
Bharti's acquisition is the latest movement towards consolidation in India's telecoms sector as major players try to position themselves to best face the tough new environment.
   
The move, which still needs to be approved by regulators, will enhance its coverage, the company said in a statement to the Bombay Stock Exchange (BSE), and see Telenor exit India.
   
“The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall base and network,” the Indian firm said in the statement.
   
Last month British mobile phone behemoth Vodafone announced that it was in talks to merge its Indian unit with Mumbai-based Idea Cellular in its own move to counter Jio's rise.
   
That deal would create India's largest telecoms company. Global brokerage firm CLSA estimated that the pair would command a combined 43 percent share of market revenue, ahead of Airtel, which is currently the market leader, on 33 percent.
 
Reliance Communications — owned by Ambani's brother Anil Ambani — and Tata Teleservices, part of the sprawling salt-to-steel Tata conglomerate, are also reportedly in talks to join forces.
   
Reliance merged with telecom operator Aircel in September last year. Bharti Airtel's shares surged more than five percent in Mumbai morning trade following the Telenor deal announcement.
   
“The decision to exit India has not been taken lightly,” Sigve Brekke, Telenor Group CEO, said in the statement.
   
“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,” he added.
   
Telecoms analyst Baburajan Kizhakedath said Telenor was quitting India because the intense competition meant there was no scope for growth. “The Airtel-Telenor deal is probably the best exit route for Telenor,” he told AFP.

TELENOR

Telenor suspends four execs over Vimpelcom

Telenor on Wednesday suspended its finance director, legal head, and two other executives, as part of its deepening internal investigation into possible complicity with alleged corruption at VimpelCom, the Russian telecoms group.

Telenor suspends four execs over Vimpelcom
Telenor finance director Richard Olav Aa alongside chief executive Sigve Brekke at Telenor's latest results. Photo: Berit Roald / NTB scanpix
Telenor finance director Richard Olav Aa, General Cousel Pål Wien Espen, Fridtjof Rusten, the finance director of its Thai subsidiary, and Ole Bjorn Sjulstad, the head of Telenor Russia. 
 
Telenor chief executive Sigve Brekke stressed that neither Telenor, nor Deloitte, which has been hired to carry out the internal investigation, had any evidence that the four were aware of or involved in corruption at Vimpelcom. 
 
“We have no reason to believe that these have been involved in the alleged corruption in VimpelCom. They are trusted managers with a solid track record in Telenor,” he said. 
 
“This is being done in order that they are not able to question the independent investigation being conducted by Deloitte.” 
 
However, according to Cato Schiøtz, a lawyer for former VImpelcom chief executive Jo Lunder, the four executives had all been sent two e-mails in 30 September and 4 October 2011, in which an anonymous whistleblower expressed concerns over payments in connection with that Vimpelcom's licenses in Uzbekistan. 
 
“A Telenor employee in emails on 30 September and 4 October notified Telenor about concerns related to the payment Vimpelcom had carried out,” Shiøtz told VG .”In the emails, the employee said that he had alerted Jo Lunder but that the transaction had gone through anyway after Lunder had conducted surveys.” 
 
Rusten and Sjulstad have both previously served as Telenor nominees on Vimpelcom’s board, while Olav Aa and Pål Wien Espen have had key legal roles within the parent company. 
 
Telenor owns a 33 percent stake in the Russian operator, which is being investigated by US and Dutch authorities for allegedly paying bribes in order to gain access to the Uzbek telecoms market.