Telenor has written down the remaining Book Value of its Indian operations. Post the write-down, the company has no further accounting exposure related to India. It is reliably learnt that Uninor may bid selectively to counter the high reserve price for 2G spectrum in the upcoming auction.
Why just 6 Circles ? Uninor’s top six circles account for ~70% of revenues. Based on acquiring 5Mhz in each of these circles (at reserve price) Telenor would need to pay Rs44bn, only 1/3 of which is payable upfront (Rs15bn) with the remainder spread over 10 years.
Uninor’s Quarterly Performance – Dismal Revenues grew 13% qoq (base is much smaller compared to others) to Rs8.8bn. Rev/min is Flat – tells us that while the company remains competitive, it is not undercutting competition. MoU rose only 4mins qoq v/s 10-12min for Airtel and Idea. Active Subscribers came down to 74% (was at 81% in Sep-11).
Uninor has been the only serious new entrant in GSM space. Uninor’s slowdown is positive for incumbents and its traffic would get redistributed to other players.Let us see what will be the Spectrum Reserve Price and the compromise formula for Uninor and MTS Sistema Shyam.
I believe that not only Uninor/Telenor; even MTS, Videocon and STel will bid for selected circles. STel may exit or get that circles where they have 3G spectrum. Videocon may go for 5 circles. MTS as it is on CDMA front, may go for 10-12 circles. Telenor may stick to top circles – UP E, UP W, Bihar, AP, Maharastra, and may think about WB, Kolkata, Mumbai and Delhi.