After witnessing the profit (Rs. 1,531 crore) achieved by Uninor in Q1 2014, Telenor, its parent company from Norway, has decided to infuse more money into its Indian business by acquiring Uninor.
Uninor is the only telecom provider having GSM spectrum across 6 circles and offering only prepaid services.
The finance ministry has given its approval of the acquisition allowing Telenor to buyout the remaining 26% stake in Uninor held by Lakshdeep Investments. This would fetch in Rs. 78.08 crore in the country as FDI (Foreign Direct Investment).
How would this acquisition of Uninor be beneficial for its subscribers?
Uninor was posting losses since it started its operations in India. It started with a novel idea of discounted calls based on the time of the call and the location of the users. Though being a good concept, it failed to bring in the desired revenue for the operators. I had used Uninor services in Maharashtra when it was launched and to be very frank, the call quality was not that good. So, I switched to other operators and never looked back at Uninor again.
Quality of service brings in revenue not the attractive tariff plans.
Telenor is eagerly waiting for the forthcoming spectrum auction for the 900 MHz band for expanding its business. It wants to buy licences across 6 more circles. Telenor is also planning to launch high-speed data services for additional revenue.
What is Telenor planning?
Telenor has also announced to invest an additional Rs. 500 crore for expanding its network and distribution infrastructure by 30%.
It is also planning to increase Uninor’s subscriber base from 39M users across the circles of UP East, UP West, Maharashtra, Gujarat, Bihar, and Andhra Pradesh. It also interested in buying licenses across other circles as well for achieving the same,
We are sincerely hoping for things to become better for Telenor when it acquires Uninor. This will increase the competition and bring down the tariff even further. And, who wouldn’t want that?