Dec 5, 2008

Business - India;Telenor to face tough time ahead

Nordic telecom giant and the world's seventh largest telecom company Telenor could find it difficult to enter the Indian market in the aftermath of the Mumbai terror attacks.

The $15-billion company had recently announced acquiring 60% stake in Unitech Wireless for $1.2 billion. Telenor is also Asia's fourth largest telecom operator owns a 100% subsidiary, Telenor Pakistan and also operates in Bangladesh through Grameenphone, which is the largest mobile provider in the country. These attributes are bound to make it tough for Telenor to convince the government that security would not be jeopardised.

In fact, in October, when Telenor announced its decision to pick up stakes in Unitech Wireless, there were apprehensions about security concerns because of its presence in Pakistan and Bangladesh. This was because, in the past, Egyptian telecom operator, Orascom, which had picked up stakes in Hutchison's parent company in Hong Kong and was getting a beneficial stake in India's Hutch-Essar, had raised the eyebrows of the security agencies. Orascom also has operations in Pakistan and Bangladesh.

Official sources said that the recent terror attack is bound to alert the home ministry, which is likely to take tough stance on Telenor's proposal.

The main problem, which arises in such a case, is that the remote access server of the parent company (Telenor) company could be well placed out of the host country, which could be the same for India, Pakistan and Bangladesh. There are chances that a Pakistani official can oversee the entire network of the company's India operations.

Though in letter it is binding for each foreign telecom company, which enters the Indian market to ensure that no customer information from the host country is transferred outside and no interception mechanism for intercepting the calls to be placed outside India, just baring the network outlay to a rival country's security agencies could be hazardous, officials said.

In such a scenario, the information becomes vulnerable and risky if anyone infiltrates the information systems and the last thing India would want is terrorist organisations penetrating inside or getting a whiff of information. It is comparable to seeing a Google earth map of the Taj Hotel in or the CST station in Mumbai.

Though the department of telecommunications (DoT) sources didn't confirm if talks on the same had initiated, but firmly said that it was bound to come under the scanner of the security agencies now. Officials said that Telenor is yet to officially apply for the regulatory approvals.

In October, Unitech had announced a 60% stake sale in its telecom venture, Unitech Wireless for $1.2 billion to Norwegian telecom player Telenor. With this deal, Unitech Wireless has been valued at around Rs 11,620 crore. Telenor had then said that it plans to complete the entire transaction by September, 2009.

No comments: