Etisalat exits India

UAE operator Etisalat has confirmed that it will exit the Indian market, marking  yet another foreign investor departure in the wake of the 2G spectrum licensing scandal.

The carrier has been operating in the Indian market through a JV set up with local real estate firm DB Realty. It owns 45 per cent of the JV, called Etisalat DB, but has made losses on the operation following the Indian Supreme Court Order to cancel all 122 licences issued in the 2008 spectrum sale.

Earlier this month, Etisalat wrote off a figure of $827m, the value it places on its stake in the JV, and warned that it may suffer a further financial impact as a result of the scandal. At the time, it said it is still considering its strategic options in India. Now though, it has confirmed that it will suspend its services in India until further notice.

“The decision of the Supreme Court of India to revoke all 122 licenses issued by the government in January 2008… has removed Etisalat’s ability to operate from 2 June 2012,” the company said in a statement.

The statement added that the operator is now taking “steps to reduce operating costs, including the suspension of its network and services”.

“The decision has been taken in order to protect the interests of all stakeholders and to avoid incurring further costs at this time of rapid change and continued uncertainty in the Indian telecommunications sector.”

The operator did add, however, that it could re-enter the Indian market at a later date, but only once there is “clarity on the auction process”.