Telenor Gets A "Yes" from Indian Govt.

Telenor Gets A Yes: India Approves Full Ownership For Its Local Units

The Indian government has just given the approval to Norwegian telecommunications conglomerate Telenor ASA to acquire full ownership of its local unit. A statement was released by the Indian government to this effect recently. Telenor will now be the second global telecom and mobile phone carrier to be given full control and ownership over its Indian unit following relaxation of governmental rules last year.

Telenor is investing a sum of 7.8 billion INR rupprs or USE $129.16 million to raise its stake in the unit. Currently, it owns about 74% stake in the units. After Vodafone Group plc was given the right to fully own Indian units, Telenor follows suit with the recent approval by the government.

The statement released by the government was quoted in a Reuters report. According to the report, the statement indicates that the FIPB or Foreign Investment Promotion Board has approved around 22% FDI investment proposals worth a total of 39.52 billion rupees.

A panel of the Indian government has also given approval for Telenor ASA's plans to gain full control of local cellphone services venture which will then help the Norwegian firm to strengthen and boost its presence in the globe as one of the leaders in the Indian market. Considering that the firm is now expanding in what is the globe's second largest telecommunications market, this is a major avenue of growth for Telenor.

Telenor had requested the FIPB of India to increase the stake from 74% to 100% in its unit. The FIPB or Foreign Investment Promotion Board is a panel of senior government officials who is in charge of overseeing FDI investment proposals. With this move to be able to gain 100% control of its Telewings Communications Services Pvt Ltd, Telenor will certainly get a good connection to the Indian market.

In good news for the telecom company, the panel's website also indicated that Telenor's proposal to gain 26% stake from Lakshdeep Investments which is a financial investor, has also been given approval. Telenorwill now invest a sum total of 780.8 million rupees for the stake.

Currently, Lakshdeep Investment is under the ownership of Sudhir Valia. Valia is also a director in Sun Pharmaceutical Industries Limited. Telewings is the Indian company of the Oslo based Telenor. It provides cellphone services under the brand name called Uninor in 7 service areas of the company. Telenor currently serves around 22 telecom areas and as late as July this year, WSJ estimates it had around 40 million cellphone subscribers.

Prior to being granted full ownership of the unit by the parent foreign company, New Delhi had stipulated a 74% limit on foreign holding in these firms. Vodafone Plc had earlier also purchased the stake of Indan partner Verizon Communications Inc. Russian firm Sistema JFC has also approached the government for similar relief. For now, Telenor has just gained the Vodafone advantage.