February 23, 2012
Etisalat of the United Arab Emirates has announced plans to leave India’s telecoms market, adding to the ongoing reverberations of a recent Supreme Court decision cancelling 122 mobile licences.
The Abu Dhabi group said in a statement that the decision was taken “to avoid incurring further costs at this time of rapid change and continued uncertainty in the Indian telecommunications sector”.
The company, which had earlier this month already taken an $827m writedown on its operations in the country, has said that it expected India’s government “to fairly compensate investors” for the licence losses.
The moves makes Etisalat the second company affected by the ruling to announce its Indian departure, following similar moves this week by S TEL, a small operator allied with Batelco of Bahrain.
India’s Supreme Court cancelled licences belonging to 10 mobile operators in early February following an investigation into corruption in the allocation of second-generation mobile licences in 2008.
Etisalat entered India following the 2008 licensing process, via the acquisition of a 45 per cent stake in Swan Telecom for $900m, later renamed Etisalat DB, as part of a joint venture with DB Realty, an Indian real estate company.
Despite investing an estimated $1bn in its network by the end of 2011, the group had won only about 2m customers in India’s ferociously competitive mobile market, a share of about 0.3 per cent.
Source: Financial Times