Companies & Sectors
Uninor to scale down operations in TN, Kerala, Karnataka and Orissa

Uninor said in light of the continuing uncertainty around the auctions, it decided to scale down its operation in Tamil Nadu, Kerala, Karnataka and Orissa  

New Delhi: Mobile services provider Uninor on Tuesday said it will scale down operations in four telecom circles - Tamil Nadu, Kerala, Karnataka and Orissa, while sharpening focus on nine other areas in view of continuing uncertainty over spectrum auction, reports PTI.
"In light of the continuing uncertainty around the auctions, the Uninor management has decided to focus its resources by strengthening nine of its 13 commercially active circles," the company said in a statement.
It said it will strengthen operations in UP East, UP West, Bihar and Jharkhand, Kolkata, West Bengal, Andhra Pradesh, Mumbai, Maharashtra and Goa and Gujarat.
This will place the company in a stronger financial and operational position to enter the auctions, rules permitting, the company added.
Uninor has 6.8 million customers in these four circles and 400 direct employees. It said it will "evaluate possibilities of relocating some of the employees to other circles and also provide assistance in securing employment outside the company".
Uninor, in which Norwegian firm Telenor holds over 67% stake, was one of the operators impacted by the Supreme Court order cancelling 122 licences in the 2G spectrum allocation case.
All its 22 licences were quashed by the apex court and are set to expire on 7th September. The court has also ordered conducting fresh auctions by 31st August.
At the end of May, Uninor had 45 million subscribers nationwide. It said the uncertain environment has also affected its ability to secure operational funding.
"Since the Supreme Court order, we have pursued every possible measure to take our business forward in its current form. However, we are now forced to take this difficult but necessary decision," Uninor Managing Director Sigve Brekke said.
The plan now is to enter the auctions with a very strong presence in these nine circles, auction rules permitting, he added.
"We will focus funds, resources and all our efforts to meet even more aggressive targets in these nine circles," Brekke said.
The Telecom Regulatory Authority of India (TRAI) has recommended a base price of Rs3,622 crore for a megahertz of airwaves to be auctioned, and over Rs18,000 crore price for pan-India operations. Uninor has already expressed concerns over the "extremely high" price. 
Uninor said it will maintain a smaller network and remain operational in the four circles.
"Network in these four circles remains operational and the scale down of operations in these circles will be gradual. Uninor will give all its existing customers a 30 day notice before any network scale down is expected to begin," it said.
Uninor will also stop activation of any new subscribers in these circles with immediate effect.
The company said it will closely work with each of its distribution channel partners in the four circles to enable liquidation of market stock or compensation as needed.
"The company will work jointly with its business partners to together recast several agreements in line with the new focus," it added.
Meanwhile, Telenor Group President and CEO Jon Fredrik Baksaas said in a statement, "Since 2nd February (when the Supreme Court cancelled the licences), Telenor Group has continued to single-handedly provide financial backing to Uninor on the belief of an early resolution.
"However, with no sight of either auction rules or dates six months later, we support Uninor in taking this financially prudent decision." 
Baksass said the group will continue to extend funding support to Uninor in the nine circles.
"We urge the Indian Government to provide clarity on the auction policy at the earliest," he added.



venkatesh karnasula

4 years ago

hi sir why network are changed we can tie with another network to stop that auction

Canara Bank Q1 net profit up 7% at Rs775 crore

During the June quarter, Canara bank's total revenues, including interest income, rose 19% to Rs9,165.47 crore while NPA increased to 1.98% from 1.7%

Mumbai: Public sector lender Canara Bank on Tuesday posted 6.8% increase in net profit at Rs775.28 crore for the first quarter ended June 30, 2012.
It had posted a net profit of Rs 725.8 crore for the same quarter last fiscal, Canara Bank said in a filing to the BSE.
The total income of the bank increased 19% during the April-June quarter to Rs9,165.47 crore, from Rs7,707.5 crore in the year-ago period.
The interest income of the bank rose to Rs8,472.86 crore during the reporting quarter from Rs7,180.7 crore in the first quarter of the previous fiscal.
Bangalore-based bank's gross non-performing assets (NPAs) rose to 1.98% during the quarter ended June 30 from 1.69% in the same quarter year-ago.


New CDR norms may erode PSBs' net profit by up to 18%

If the new CDR guidelines are followed net profit of state-run banks will likely decline by 6% to 18%, but for private banks, it will be much lower at 0.2 to 2% says StanChart in a report  


Mumbai: The new corporate debt recast (CDR) norms issued by the Reserve Bank of India (RBI) last week will have a massive impact on the profitability of state-run banks -- to the tune of 18%-- but will promote discipline too, says a PTI report quoting Standard Chartered Securities (StanChart).


However, the report says, the impact on private sector banks will be minimal, up to 2% in profit terms.


"If the new CDR guidelines are followed, net profit of state-run banks will likely decline by 6% to 18%. But for private banks, it will be much lower at 0.2 to 2%," the report by Mahrukh Adajania and Rounak Agarwal said.


It noted that new provisioning norms for CDR loans are still substantially lower than the existing NPL provisioning.


State-run banks together had a CDR book of Rs1.2 lakh crore as of FY12, according to the report. In FY12 alone, they added Rs62,800 crore in restructured assets.


The new provisions, under which banks will have to provide addional 3% in the first year and 5% in the second year, will see this increasing by Rs3,500 crore.


SBI will have to make Rs930 crore additional provisioning at 3% incremental coverage, which will bring down EPS growth (FY12) to 34% from 42%.


As of March 2012, SBI had a restructured loan book of Rs31,160 crore with the FY12 CDR book totalling Rs8,400 crore.


The second biggest victim will be Punjab National Bank, whose provisioning will rise by Rs690 crore, but its EPS impact will be minus 1%, from 10%. The Delhi-based lender had a CDR loan book of Rs23,060 crore as of FY12; it added Rs1,481 crore in FY12 alone.


The worst impact on EPS will be at Oriental Bank of Commerce, which will see EPS erosion at 46% (minus) post-implementation, from existing minus 35%.


The second biggest impact on EPS will be at Canara Bank which will witness erosion to minus 28%, which currently is also down at minus 24%, says the report, adding its provisions will rise to Rs240 crore.


Bank of Baroda, the third largest PSB, will see its EPS coming to 2% (from 10%) and its provision will rise Rs 510 crore. In FY12 its CDR stood at Rs885 crore and the cumulative restructured book at Rs17,140 crore.


The city-based Bank of India will see its EPS eroding at minus 8% from the current 3% (positive), and will also see its provisions rise by Rs430 crore. In FY12 it added Rs913 crore in CDR loans taking its overall CDR book to Rs14,370 crore.


Another city-based lender, Union Bank, will see its EPS plunging to (minus) 22% from (minus) 14% now, and CDR book will rise to Rs240 crore. In FY12 it added Rs623 crore in fresh CDR taking CDR outstanding to Rs799 crore.


Among the private sector lenders, ICICI Bank will add Rs130 crore in CDR under the new provision, and see its EPS whittling down to 22% from 24%. As of FY12 the largest private sector lender added Rs374 crore in CDR, taking its restructured asset book to Rs426 crore.


Axis Bank will have to set aside Rs110 crore in provisions, pulling down its EPS to 22% from 24%. It added Rs133 crore in CDR last fiscal with the cumulative recst loan touching Rs383 crore.


HDFC Bank will have minimal impact on provision, which will rise to Rs20 crore and will not have any impact on EPS which will continue at 30%. Its total CDR book stood at Rs78 crore.


The Reserve Bank last week issued new CDR gudelines following the recommendations of its working group seeking tighter loan recast norms, which include higher contribution from promoters to ensure their full commitment, personal guarantee from the promoter which cannot be replaced with a corporate guarantee, higher provisioning by banks on restructured loans, reducing viability tenors and changes to the recompense clause.


The new guidelines proposes 5% provision on restructured loans up from the current 2-5% in a phased manner over two years.


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