Telenor to Take a 60% stake in Unitech Wireless in India
Fornebu, 29 October 2008 - Telenor has entered into a definitive agreement to subscribe to new shares in Unitech Wireless for a consideration equivalent to USD 1,070 million. Subject to regulatory approvals, Telenor will hold a 60% controlling stake in Unitech Wireless.
"Gaining access to the world's second largest mobile market is a major achievement for Telenor. Entering the Indian mobile market gives Telenor a unique possibility to further enhance the Telenor Group's position as one of the leading emerging markets operators, and enables us to take part in the development and growth opportunities in one of the fastest growing telecom market in the world," said Jon Fredrik Baksaas, President and CEO of Telenor.
Unitech Wireless has pan-Indian telecommunications licences in all 22 telecom circles, and plans to launch its services in mid 2009. The company was established in 2007 and has already recruited more than 250 employees. The Indian market presents a large attractive opportunity to telecom operators. With a population of approximately 1.2 billion, and a mobile penetration currently at 26%, there remains significant untapped potential of additional subscribers. India is already witnessing a significant increase in mobile penetration with a net addition of approximately 8 million subscribers per month during 2008.
"India enjoys a forward looking telecom regulation and an investment friendly climate. By combining Unitech's strong presence as a trusted corporation in the Indian market with Telenor's successful experience at building and managing best in class mobile operations in Asia, we will together contribute to growing the industry and developing the mobile market in India," said Baksaas.
"We highly appreciate this partnership with Telenor, and believe that Unitech Group's local position and strengths coupled with Telenor's technical, operational and marketing expertise will form a winning team. Telenor's experience from growth markets in Asia are also a great benefit for the partnership," said Sanjay Chandra, Managing Director, Unitech Ltd.
The initial equity injection in Unitech Wireless will be made by Telenor Asia Pte. Ltd. in four tranches to be completed before the end of September 2009. The investment will be funded through draw-down on existing credit facilities and/or issuance of short-term commercial paper. Telenor intends to secure funding by raising approximately NOK 12 billion through a rights issue in Q1 2009. The Norwegian Government has stated its willingness, under certain conditions, to put forward a parliamentary proposition to participate for it's pro rata share of the rights issue.