Telenor to launch billion dollar Indian mobile venture

Telenor, the Norway-based telecom provider, will soon strengthen its global operation with the addition of a new mobile service under the brand name Uninor in India.

The move comes as Telenor joins forces with Unitech Ltd to enter the Indian market, reports Norway News. Telenor has already invested USD 500 million in the partnership with an additional USD 500 million scheduled, which will raise its share in the joint venture to 67 percent.

Telenor’s CEO and Group President Jon Fredrik Baksaas told reporters: “All the money that we are bringing in will be fully invested for the operations of the company”.

Telenor is already represented in four other Asian countries with India to join Thailand, Bangladesh, Pakistan and Malaysia which provide some 72 million users.

Baksaas explained the reasons for entering a market where there is already fierce competition and falling earnings per subscriber as being that mobile penetration in India is still relatively low and with the market being fragmented there is room for a new operator. Baksaas conceded that the challenges in the Indian market mean that the group only hopes to reach a breakeven point in around five years.

Telenor’s Head for the Asian Region and Group Executive Vice President Sigve Brekke claimed the Indian market differed greatly from other countries where the market leader usually has around a 40 percent share and the top two sharing around 80 percent of operations. In India however, the market leading Bharti Group owns just 25 percent with the remainder split up amongst a dozen fragmented operators.

“We see a great scope for consolidation here,” Brekke said.

Brekke also explained that the telecoms market strategy will consist of a three-pronged approach which will focus on brand name, value for money pricing and services along with the widest distribution network possible.

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.