Telenor’s Indian arm Uninor has admitted that a dispute with its local partner and reluctance by local investors to buy-in to the scandal-hit local telecoms sector has led to a funding crisis at the unit. In an interview with the Economic Times, Uninor MD Sigve Brekke (pictured) said the operator has been forced to take short-term loans from abroad – underwritten by its Norwegian parent – to meet its day-to-day operational costs. “Following the 2G scam and the controversies associated with the sector, the debt market in India has dried up completely for mobile phone companies,” said Brekke. “The plan was to raise an additional INR8,000 – 9,000 crore (US$1.93 billion) through debt, and since this option is no longer available, the board of Uninor had decided to go in for a rights issue to meet the funding requirements of the company.” But the rights issue has also stalled due to a dispute with local partner, Unitech, which sought a court order to prevent it happening. Brekke said that “discussions were on to resolve the issue.”

Brekke admitted that the funding issues had impacted Uninor’s expansion plans. According to the report, Uninor currently offers services in only 13 of the 22 Indian telecom circles and has put off expansion plans for “several months.” Uninor is now working to launch services in three new circles – Haryana, Punjab and Madhya Pradesh. The operator is now asking for an additional 1.8MHz of 2G spectrum (on top of its initial 4.4MHz start-up spectrum), claiming it has now reached sufficient subscriber numbers for more airwaves to be released – in line with current DoJ regulations. Brekke said that Uninor currently has 27 million subscribers and predicts 30 million by year-end and 50 million by next year.