Telecom service provider Uninor Tuesday said it is scalingdown operations in four of its 13 active circles to ensure optimal fundutilization and to take part in the 2G auction from a stronger financialposition.
"In light of the continuing uncertainty around theauction, the Uninor management has decided to focus its resources bystrengthening nine of its 13 commercially active circles," the companysaid in a statement.
"This will result in a gradual scale down of operationsin Tamil Nadu, Kerala, Karnataka and Odisha circles and a simultaneousstrengthening of operations in the circles of UP East, UP West, Bihar andJharkhand, Kolkata, West Bengal, Andhra Pradesh, Mumbai, Maharastra and Goa andGujarat."
Under this strategy, the company will maintain a smallernetwork and remain operational in the four circles while the other nine circleswill continue to build up their operations aggressively.
The operator will give all existing customers a 30-daynotice before the start of the exercise.
It has stopped activation of any new subscribers in the fourcircles with immediate effect.
The company has 6.8 million customers in these circles.
Following the Supreme Court's order to cancel the operator'slicence in February and the continuing lack of clarity about the auction,Uninor has faced an uncertain environment that has also affected its ability tosecure operational funding.
"Since the Supreme Court order, we have pursued everypossible measure to take our business forward in its current form. However, weare now forced to take this difficult but necessary decision," said SigveBrekke, managing director, Uninor.
"Our plan now is to enter the auctions with a verystrong presence in these nine circles, auction rules permitting. We will focusfunds, resources and all our efforts to meet even more aggressive targets inthese nine circles," he added.
Uninor has a total of around 400 direct employees in thesefour circles of Karnataka, Kerala, Odisha and Tamil Nadu.
As it gradually scales down, it will evaluate possibilitiesof relocating some of the employees to other circles and also provideassistance in securing employment outside the company.
The firm also said it will closely work with each of itsdistribution channel partners in these four circles to enable liquidation ofmarket stock or compensation as needed.
"Since Feb 2, Telenor Group has continued tosingle-handedly provide financial backing to Uninor on the belief of an earlyresolution. However, with no sight of either auction rules or dates six monthslater, we support Uninor in taking this financially prudent decision,"said Jon Fredrik Baksaas, president and chief executive officer, Telenor Group.