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India’s Richest Man Forces Norway’s Telenor To Exit World's Largest Market

© AFP 2023 / INDRANIL MUKHERJEEA customer selects his number of Reliance Jio Infocomm 4G mobile services in Mumbai on September 6, 2016
A customer selects his number of Reliance Jio Infocomm 4G mobile services in Mumbai on September 6, 2016 - Sputnik International
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Reliance Jio, backed by billionaire Mukesh Ambani, is offering free data and call services in world’s second largest telecom market. Fierce competition generated by Reliance Jio has hampered the businesses of rival telecom firms in Indian market.

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New Delhi (Sputnik) In a bid to counter Reliance Jio,owned by richest Indian Mukesh Ambani, Bharati Airtel has announced to buy assets of Norwegian Telenor’s South Asia unit which has lost approximately $2.87 billion since entering into Indian market in 2008. As part of agreement, Bharati Airtel, India’s largest telecom company, will not pay any amount in cash but take care of liabilities for license and telecom towers.

“The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return,” Sigve Brekke, CEO of Telenor Group, said in a statement.

Airtel will acquire Telenor India’s running operations in six highly populated states — Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam where company expects a high potential for growth. The proposed acquisition will include transfer of all of Telenor India’s assets and customers.

Since entry of India’s richest man Mukesh Ambani into telecom business, incumbent telecom companies are facing fierce competition as Reliance Jio (Mukesh Ambani telecom arm) has  offered free voice calls and unlimited data till end of March 2017. Indian government has lost more than $100 million since entry of Reliance Jio in September last year due to company’s free data and voice offer. Indian government used to charge a fix percentage of revenue earned by telecom companies. Free voice and data service offered by Reliance Jio has eaten into profits of existing companies like Airtel and Idea.

​British telecom firm Vodafone and Indian telecom firm Idea are also involved in talk for merger since long to tackle Reliance Jio business model. In coming months, telecom sector may witness merger of some smaller telecom players like Tata Teleservices and Videocon.

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