Telenor ASA, on Thursday announced that it has entered into a definitive agreement with Bharti Airtel Limited (Airtel), whereby Airtel will take full ownership of Telenor India.

Airtel is India’s largest wireless operator with over 269 million subscribers and a revenue market share of over 33 per cent. As the new owner, Airtel will take over Telenor India’s spectrum, licenses and operations, including its employees and customer base of 44 million. Telenor’s operations and services will continue as normal until the completion of the transaction.

“We believe today’s agreement is in the best interest of our customers, employees and Telenor Group. Finding a long term solution to our India business has been a priority for us, and we are pleased with our agreement with Airtel. The decision to exit India has not been taken lightly. After thorough consideration, it is our view that the significant investments needed to secure Telenor India’s future business on a standalone basis would not have given an acceptable level of return,” said Sigve Brekke, Chief Executive Officer of Telenor Group.

“The agreement underlines our commitment to lead India’s digital revolution by offering world-class and affordable telecom services through a robust spectrum portfolio spread across multiple bands. On completion, the proposed acquisition will undergo seamless integration, both on the customer as well as the network side, and further strengthen our market position considerably in several key circles. The customers of Telenor India will be able to enjoy India’s widest and fastest voice & data network, and a range of Airtel’s world-class products and services,” said Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel.

The transaction will not trigger any impairment. As of fourth quarter 2016, the remaining value of tangible and intangible assets in Telenor India amounted to NOK 0.3 billion.          

According to the agreement, Airtel and Telenor India will merge and Airtel will take over Telenor India as soon as all necessary approvals are received. As part of the agreement, Airtel will take over outstanding spectrum payments and other operational contracts, including tower lease.

The transaction is subject to requisite regulatory approvals, including approvals from the Department of Telecommunications in India (DoT) and the Competition Commission of India. The exposure to claims related to the period Telenor owned the business, will remain with Telenor.

The transaction is expected to close within 12 months. With effect from first quarter 2017, Telenor India will be treated as an asset held for sale and discontinued operations in Telenor Group’s financial reporting.

Telenor announced its entry into India in 2008. In 2016, Telenor India’s revenues were NOK 6.0 billion and the operating cash flow was NOK -0.4 billion. Telenor services are commercially available in six telecom circles in India (Andhra Pradesh, Bihar & Jharkhand, Gujarat, Maharashtra, UP East and UP West), and the company also has spectrum in Assam.