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| Augere Wireless set to sell its 4G spectrum, quit India |
| Monday, 21 May 2012 | |
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Augere Wireless backed by France Telecom and private equity funds, is set to sell its 4G spectrum in two states and quit India, as regulatory uncertainty has forced its investors to hang up on the country. Two company executives said Augere was shutting down its India operations and had asked its employees in the country to resign. Augere is the second 4G spectrum holder that is close to exiting the wireless broadband space. Qualcomm is in advanced talks with Bharti Airtel to sell its 4G permits in the four circles where it bagged airwaves in 2010. The company had won airwaves for Madhya Pradesh and Chhattisgarh in the keenly-contested broadband wireless auctions of 2010 and last year became the first 4G player in India to award an equipment contract when it appointed Ericsson to roll out its network. It had also roped in TCS to handle its IT and customer services requirements and was slated to roll out wireless broadband services in the second half of the current year under the ZOOSH Broadband brand. Augere Wireless CEO Lars Henrick Stork said the company had stopped all operational activities in India and had asked employees to go on leave as it was reassessing its plans here. He blamed the regulatory uncertainties surrounding India's telecoms sector and said it had resulted in the company being unable to raise funds from both national and international investors. "There is a lot of uncertainty hanging over the telecoms sector in India. The cancellation of licences by the Supreme Court, Trai's rules for re-auction and the exorbitantly high reserve price, as well as lack of clarity on the new telecoms policy, which was supposed to be unveiled by mid-last year and has not happened yet, all these factors have resulted in our investors stopping funding for our activities here," Stork said. Augere's investors include former Orange CEO Sanjiv Ahuja, Harbinger Capital, France Telecom, New Silk Route and Vedanta Opportunity Fund. The company also offers its services in Asia and Africa under the Qubee brand. Augere will become the first telecom company to cite funds crunch arising from lack of regulatory clarity as the reason for exiting India. Both Telenor and Sistema have threatened to pull the plug on India and warned that they will not participate in the upcoming spectrum auctions if the government accepts the recommendations of the telecom regulator. But, unlike these companies, Augere has not lost its licences, and is not required to participate in any auction. Several industry executives said Augere had approached leading Indian mobile phone companies to sell its 4G licence, but Stork declined to comment on this and said 'it was a shareholders' issue. "When you stop operations, it is natural that people will say we want to sell. We will take 4-6 weeks to reconsider our India plans," he added. Augere had paid about Rs 125 crore for its 4G permit in 2010. In October 2011, the company announced that it would invest about Rs 270 crore over the next three to five years to roll out services in Madhya Pradesh and Chhattisgarh. It had also announced that it would initially launch services in 14 cities in these two states, beginning April 1, 2012. Augere had also reportedly completed the pilot runs for its 4G foray in September 2011. "It is a shame. We had given out contracts and were ready to go. But with funding drying up, we had to stop," Stork added. –The Economic Times |
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