Uninor: On Pins and Needles?

With cancellation of all of its 22 licenses, Uninor is the worst affected by the recent Supreme Court judgement. (See 2G Verdict: An Easy Exit Route or Fresh Troubles?)

Though the company has one of the lowest Average Revenue Per User (ARPU) of INR 98, Uninor has the highest number of subscribers (36 million) amongst the greenfield operators. It has a workforce of around 17,500 and is operational in 13 circles. Uninor has also made substantial investments of around INR 140 billion in the market. (See IndiaWatch: Telenor Threatens to Close India Operations.)

At the end of December 2012, Uninor had a marketshare of 4 percent and was at the eight position right behind Aircel Ltd. Uninor saw significant success in the rural market. The company has consistently focused on voice and not data. This was the prime reason why it didn't participate in the 3G or Broadband Wireless Access (BWA) auction. (See Telco's Marketshare Report Card, Uninor Triumphs in the Rural Market and Idea, Uninor Shine in September.)

Now, after experiencing a reasonable amount of success in the Indian market, the company stands at crossroads with no clear path ahead. To begin with, it faces the threat of subscriber exodus in the wake of the recent Supreme Court judgement. Second, it has to put the anxieties of its employees and vendors at rest even as it prepares for the long battle ahead.

The senior management has indicated that exit from Indian operations remains an option. They are also exploring the option of participating in the auction provided greenfield operators are the only ones participating in it, according to a recent report in Hindustan Times.

A significant number of low-ARPU subscribers would be hoping for Uninor's long and fruitful stay in the country. With incumbents likely to increase the tariff, Uninor would have emerged as a favored choice for a section of the society that was still using mostly voice and SMS.

There is no clear path ahead for the company and the senior management of the company is likely to be on pins and needles right now.

Gagandeep Kaur, Editor, Light Reading India