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Mumbai/New
Delhi: Abu Dhabi-based telecom firm Etisalat Thursday
wrote off its investments worth $827 million in the mobile company
Etisalat DB and said the company is evaluating its strategic
options in India.
Etisalat is the second foreign firm to do so after the Norwegian
Telenor, parent company of Uninor, following the Supreme Court's
order to cancel 122 2G licences last week.
Etisalat said it had to take the step in accordance with
international accounting norms.
"In accordance with International
Financial Reporting Standards (IFRS), Etisalat management decided
to recognise an impairment charge amounting to an aggregate AED
3,044 million ($827 million)," said the company in a filing at the
Abu Dhabi Stock Exchange.
The company has a 45 percent stake in Etisalat DB, which is a
joint venture between the DB Group and Etisalat. The Indian mobile
service provider had 1.6 million customers as of Dec 31 and ranks
14th in a market of 15 operators.
"Etisalat is continuing to assess the legal consequences of the
Supreme Court's decision and its strategic options in India. Based
on the outcome of our assesment and certain developments, there
may be further impacts on our finanical statements which will be
reflected in due course."
Etisalat is the second foreign firm to do so after the Norwegian
Telenor, parent company of Uninor, following the Supreme Court
order.
Telenor had said it had written off its investment of about $724.5
million (4.2 billion Norwegian Kroner) following the Supreme Court
order cancelling the service provider's 22 licences.
Thursday's development came as the Indian government kept a close
watch on the business and diplomatic fallout of the Supreme Court
order. Sources said it was weighing all options, including a
filing a review petition.
Another foreign investor, Bahrain-based Batelco, Wednesday said it
would exit from India, selling its stake in mobile firm STel.
STel, which had acquired licences to operate in six circles, is a
joint venture between Batelco and Sky City Foundation, owned by
former Aircel promoter and serial entrepreneur C. Sivasankaran.
While Batelco has thrown in the towel, the other player having
considerable foreign stakes, Sistema Shyam Teleservices, has said
it would fight the order.
Telenor, which has the Norwegian government as its majority
shareholder, got its IT minister to lobby its case, while the
company said it was also looking at legal recourse.
Russian Communication Minister Igor Shchyogolev is also expected
to meet his Indian counterpart Kapil Sibal to argue Sistema's
case.
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