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Telenor in legal disputes in India and Pakistan, buys VimpelCom shares

Telenor has been told that it may only bid for spectrum in India as part of its Uninor JV

Nordic operator group Telenor has been busy handling legal disputes this week, demanding compensation from Indian partner Unitech following the cancellation of its 2G spectrum licences and filing separate lawsuits against Nokia Siemens Networks and Huawei in Pakistan. The firm also announced that it is withdrawing all its longstanding legal wranglings against Altimo Holdings & Investments.

Following the recent decision by the Supreme Court of India to cancel all 122 licences issued in the country’s 2008 2G spectrum sale, Telenor has said that it holds Unitech liable for the breach of warranties related to the cancellation of the licenses.

It is seeking compensation for all investment, guarantees and damages caused by the Supreme Court Order and is also making an indemnity claim against Unitech for the failure to obtain spectrum in the strategically critical Delhi circle.

“This is directly related to warranties that Unitech gave to Telenor as part of creating a joint venture, about having valid licences for operation – and that was included in the shareholders agreement,” Tor Odland, group VP of communications at Telenor told Telecoms.com.

“We have initiated the processes by notifying them that a claim will arrive and we shall see what the financial solution to this is.”

Unitech appeared to be taken aback in its initial response to the news. The company told Indian website myiris.com:

“We are surprised to receive the indemnity claim from Telenor Group taking a plea of the order passed by the Honourable Supreme Court and simultaneous release of press statement to the media by Telenor Group which is not only a clear violation of the confidentially covenants agreed in the shareholders` agreement but also an action to malign the reputation of Unitech.”

“At best, Telenor Group can invoke the provisions between the Governments for protection of their investment in India, but they shall have no valid claim on Unitech and any demand from Unitech shall be contested,” the company added.

However, Telenor wants to continue operating in the country, and said it will consider every option available to secure the continued successful development of its mobile services in India.

Meanwhile, across the border, in Pakistan, the Nordic group has said that it filed separate lawsuits against Nokia Siemens Networks and Huawei Pakistan. It’s not clear what the dispute is about, but we know Huawei was supposed to offer managed network services to Telenor Pakistan for three years, starting April 2011.

While Telenor confirmed this, it would not be drawn into commenting expansively on the matter. Aamer Izhar Ul Haq, vice president corporate affairs & security at Telenor Pakistan, said in a statement: “As the matter is sub-judice, we are unable to comment any further on the subject.”

Finally, the operator is also putting its dispute with Altimo to rest, having purchased 234 million preferred shares in Russian operator VimpelCom from Weather Investments for $374.4m. This increases Telenor’s voting share in VimpelCom to 36.36 per cent.

“In connection with the transaction, Telenor has withdrawn all its claims against Altimo Holdings & Investments Ltd., Altimo Cooperatief U.A. and VimpelCom Ltd. in the pending arbitration proceeding, and will work to expand the VimpelCom Board to eleven members. Telenor’s withdrawal of its claims will result in the termination of the VimpelCom shareholders agreement,” Telenor said in a statement.


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