Telenor's Indian Predicament: To Exit or To Stay?

            

Details


Case Code : CLBS121
Publication date : 2012
Subject : Business Strategy
Industry :Telecom
Length : 03 Pages

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

The case deals with Telenor’s venture into the Indian telecom market and the problems faced by it due to regulatory and judicial interferences. Telenor, a Norwegian telecom giant lured by the growing prospects of the Indian market entered into the industry through a joint venture with Unitech, an Indian construction company which had no expertise in the area. Uninor, the joint venture, was very innovative in their business and marketing strategies and became very successful, steadily building up their market share. The company got a rude shock when the Supreme Court of India cancelled its licenses on the pretext that the method through which the Government had allotted them was not constitutional and not profitable. Using this as a reason the regulator of the industry suggested that an auction with a substantially high base price would the appropriate method to reallocate the licenses. Now, the Norwegian government owned, Telenor is faced with a dilemma whether to shell out substantial amount of money and participate in the auction or to cover up their losses and look else where.

Issues:

Understand the issues and challenges faced by a new entrant into a foreign market.
Analyze importance of analyzing the market environment and its future developments.
Analyze and discuss the problems faced by a joint venture in a foreign market.
Analyze and discuss different strategies that could be followed by a company facing closure.

Introduction

In early 2012, telecom company Uninor , a joint venture between the Norway-based Telenor Group (Telenor), a global mobile telecom giant, and Unitech Group (Unitech), an Indian real estate company, was having problems with its investments in India. Uninor’s 22 telecom licenses were part of the 122 licenses cancelled by the Supreme Court of India (SC), the final court of appeal in the country, on the grounds that the telecom ministry did not follow established methods like auctioning for granting of licenses...

Key words:
2G Spectrum Auction, Telenor, Uninor, Regulation, Entry strategies, Indian Telecom Sector





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