Monday, February 6, 2012

Farvel Telenor ... and Thank You!

As you may have guessed, "farvel" is Norwegian for "farewell" or "goodbye"!
I refer of course to statements by Telenor executives indicating an exit from India is an option. A WSJ Article discusses this further - though I notice the article glosses over the fact that Telenor's Indian partner figures prominently in the ongoing trial of the then Telecoms Minister and several others.
Now, while no-one should be pleased that an amount of over $1.25 billion should be written off by anyone due significantly to India's Government's inability or unwillingness to manage itself better, the flip side of the argument is that this may help end the well known practice of international strategic investors in India and several other countries in Asia and elsewhere, relying on local partners to "take care" of the less than wholesome side of business in those countries while claiming a track record of impeccable business practices.
If this happens, as the international company with the most to potentially lose from the cancellation of 2G licences, Telenor is unwittingly owed a debt of gratitude.
A word on the cancellation of licenses - given the trial is still in progress at a special court, hasn't India's Supreme Court jumped the gun? Also, shouldn't a contract entered into by the Indian Government have some  sanctity?
My recommendation - the licences should stand with it being made clear to the holders that any determination at the trial of wrong doing by either partner or by the joint venture itself of would involve heavy fines of perhaps 75% of the estimated price of the spectrum today. Such estimate to be done by an independent, qualified entity commissioned for the purpose by the Government.
Clearly everyone directly and indirectly involved with Indian business can take something away from this otherwise unfortunate chain of events!

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