Telecom service provider Uninor Tuesday said it is scaling down operations in four of its 13 active circles to ensure optimal fund utilization and to take part in the 2G auction from a stronger financial position.
"In light of the continuing uncertainty around the auction, the Uninor management has decided to focus its resources by strengthening nine of its 13 commercially active circles," the company said in a statement.
"This will result in a gradual scale down of operations in Tamil Nadu, Kerala, Karnataka and Odisha circles and a simultaneous strengthening of operations in the circles of UP East, UP West, Bihar and Jharkhand, Kolkata, West Bengal, Andhra Pradesh, Mumbai, Maharastra and Goa and Gujarat."
Under this strategy, the company will maintain a smaller network and remain operational in the four circles while the other nine circles will continue to build up their operations aggressively.
The operator will give all existing customers a 30-day notice before the start of the exercise.
It has stopped activation of any new subscribers in the four circles with immediate effect.
The company has 6.8 million customers in these circles.
Following the Supreme Court's order to cancel the operator's licence in February and the continuing lack of clarity about the auction, Uninor has faced an uncertain environment that has also affected its ability to secure operational funding.
"Since the Supreme Court order, we have pursued every possible measure to take our business forward in its current form. However, we are now forced to take this difficult but necessary decision," said Sigve Brekke, managing director, Uninor.
"Our plan now is to enter the auctions with a very strong presence in these nine circles, auction rules permitting. We will focus funds, resources and all our efforts to meet even more aggressive targets in these nine circles," he added.
Uninor has a total of around 400 direct employees in these four circles of Karnataka, Kerala, Odisha and Tamil Nadu.
As it gradually scales down, it will evaluate possibilities of relocating some of the employees to other circles and also provide assistance in securing employment outside the company.
The firm also said it will closely work with each of its distribution channel partners in these four circles to enable liquidation of market stock or compensation as needed.
"Since Feb 2, Telenor Group has continued to single-handedly provide financial backing to Uninor on the belief of an early resolution. However, with no sight of either auction rules or dates six months later, we support Uninor in taking this financially prudent decision," said Jon Fredrik Baksaas, president and chief executive officer, Telenor Group.