Norway issued a blunt warning to India today that if telecom company Telenor is forced to move out as a result of the Supreme Courts scrapping of 2G licences and Trais subsequent recommendations on fresh auction,it would have political implications.
Telenor is not just any company, Norways minister of trade and industry Trond Giske said. Fifty-four per cent of its shares are owned by the Norwegian people through the state. So if it is forced to move out of the country (India),it would have further political implications, Giske said.
The minister said Telenor had invested over $ 3 billion in India,and shutting shop would be an unprecedented blow. If this investment fails,it will be probably the biggest loss a Norwegian company has in foreign investments ever. I think also it will be fair to say that it will influence the view of India as an investment country, Giske said.
Companies and investors will look for market opportunities,skilled labour and economic growth all of which are present in India. But they also look for long-term stability, he said.
Giske met Telecom Minister Kapil Sibal and Planning Commission deputy chairman Montek Singh Ahluwalia to take up Telenors case. He also met the employees of Uninor,Telenors Indian joint venture with Unitech Wireless Ltd.,which had 22 of the 122 2G licences that were cancelled by the Supreme Court in February.
Foreign governments,investors and domestic industry have repeatedly warned that Indias attractiveness as an investment destination is coming under a cloud. Telenor CEO Jon Fredrik Baksaas was among four top telecom chiefs who met five senior cabinet ministers and Ahluwalia over the telecom regulators proposals recently.
Giske said Norway is keen to reach a compromise. The objective of my visit is to inspire and encourage people working in Uninor and also to have a dialogue with the Indian government on how to find a middle ground that will not hurt any player, he said.
However,he said,The question that will be asked is that if state-owned companies (like Telenor) are treated like this,how will private investors be treated?
Telenor has already written off about $ 1.38 billion of its investments in India,and invoked the Bilateral Investment Protection Agreement. It will be almost impossible to continue operations given the current regulators proposals for limited bandwidth sale and high reserve price, Baksaas said today.