Uninor operating loss widens in Q1
May 09, 2012 (Menafn - Mint - McClatchy-Tribune Information Services via COMTEX) --Uninor's operating loss for the first quarter increased nearly four times after its Norwegian parent wrote off a huge sum on its Indian operations on regulatory uncertainty.
Telenor ASA also declined to give a forecast for its Indian subsidiary, making it clear that it will exit the country if business conditions didn't improve.
Uninor's operating loss for the first quarter of 2012 widened to 4.68 billion Norwegian krone (about '4,285 crore) from a loss of 1.25 billion krone a year earlier, after Telenor wrote off 3.9 billion krone of the value of its Indian unit. Revenue increased to about 1 billion krone from 548 million krone.
"If it hadn't been for the current regulatory situation, Uninor would have been EBITDA (earnings before interest, taxation, depreciation and amortization--a key measure of profitability) break-even in the second quarter of 2013," Jon Fredrik Baksaas, president and chief executive of Telenor Group, said during a presentation of the first-quarter results.
Baksaas was referring to the 2 February Supreme Court verdict that cancelled 122 telecom licences awarded to nine operators in January 2008. The apex court ordered that all the spectrum be auctioned again as per the guidelines of the Telecom Regulatory Authority of India (Trai).
The regulator's guidelines, however, met severe criticism from both the industry and the government.
"When they exclude India from their guidance, that's a clear signal that unless something changes, they'll exit," Espen Torgersen, an analyst at Carnegie told Reuters. "On the operations, it's difficult to imagine a more in-line result."
Based on the new guidance without India, Telenor's full-year revenue is expected to grow at a rate "above 4%" after a previous target for "above 5%" including India.
Telenor did not provide comparative forecasts but said that "on comparable basis, the positive outlook is maintained".
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