UPDATE 1-Telenor to compete in India, but won't drive price cuts
* CEO says aiming for 8 pct India market share in 5 yrs
* Sees Asia experience helping India launch
* Could adjust break-even targets based on initial response
BANGALORE, Nov 13 (Reuters) - Norwegian telecom firm Telenor (TEL.OL), which aims to launch India operations by December, will price its call charges competitively but will not be the most aggressive, its chief executive said on Friday.
Jon Fredrik Baksaas told a select media briefing at the Southern Indian city of Bangalore he was confident of the growth potential in the world's fastest-growing wireless market and would aim for an 8 percent share within five years of launch.
Telenor, which last year bought into a nascent telecom firm floated by Indian realty Unitech Ltd (UNTE.BO), will join the crowded 11-operator market where intense competition is driving drastic cuts in call charges.
Ventures of UAE's Etisalat (ETEL.AD) and Bahrain's Batelco BTEL.BH are also set to start services in India by end 2009.
"We may also participate on the price as the criteria, but you don't find Telenor as the most aggressive price runner in the markets in which we operate," Baksaas said.
After strong response to a low-profit but customer-luring per-second billing plan launched by Tata Teleservices, market leaders Bharti Airtel (BRTI.BO), Reliance Communications (RLCM.BO) and Vodafone Essar (VOD.L) have all followed suit.
"Of course we need to have a pricing which is competitive," said Sigve Brekke, Telenor's head of Asian operations. "(But) we are not the one that drives the price competition ourselves."
Even as subscriber addition remains strong at an average 14 million a month for 2009, increasing low-paying users is putting pressure on revenue and profit of these firms.
Telenor, which will launch India services under the brand name Uninor, owns mobile firms in Pakistan and Bangladesh and considers itself as the second-largest foreign operator in Asia after Vodafone (VOD.L).
"It's on the back of experience of other operations in Asian markets that we feel confident to give it a try in India, knowing that there will be significant growth in the number of customers, knowing that the economic growth is one of the best," Baksaas said.
LONG ROAD AHEAD
Telenor, which currently owns 49 percent in the telecom venture Unitech Wireless and is on track to raise its holding to an agreed 67 percent, has already accounted EBITDA loss of 11-14 billion rupees ($240-$300 million) in 2009. Continued...
