Some 15 months ago, Norwegian telecom operator Telenor, that partners real estate group Unitech, had dismissed the possibility of cancellation of licences as a “mere speculation”. The same company is threatening to exit India now, after the Supreme Court order cancelling all the controversial 122 telecom licences falling under the alleged 2G scam. How times change!

In November 2010, Sigve Brekke, Telenor Asia head, had told a group of Indian reporters that cancellation of licence was a hypothetical question and that the Indian government had scrutinized in great detail about the company and its investment in Unitech Wireless. “We entered India with a clear understanding that everything is okay,” Brekke had said then.

The Norwegian telco has since then faced much trouble in the Indian market, including row with its Indian partner over the rights issue and of course arrest of Sanjay Chandra, who had to step down as the Unitech Wireless chairman over his alleged role in the 2G case. The court order on cancellation of licences and a fresh round of 2G auction have now turned Telenor’s India plans topsy turvy.

So much so that Telenor chief executive Jon Fredrik Baksaas told a foreign agency in Oslo two days ago that exiting the Indian market was an option before it.

It’s hard to tell whether Telenor is seriously considering the exit option. In fact, soon after the exit news was splashed all over the media, the company’s publicity department came out with a statement giving out quite a contrary signal. “Telenor Group wants to be clear that the Uninor operations are continuing. Our intention is to fight to protect our lawful investments in the country,” it said.

For Telenor and other foreign telcos, India is a market they cannot skip, whatever the odds at present. And they know it too well. The long term business opportunity in India holds much promise. The young population in the country, a growing middle class and disposable income, and an entire rural belt that is yet to be captured in a big way for mobile telephony–all this should compel foreign telcos to stay on in India.Given the saturated telecom market in the US, Europe and many parts of Asia, it is India that will continue to be of interest to the foreign players.

As for the plight of the foreign telcos, which had picked up stake in the new licencees, perhaps they should have done better research before entering partnerships in India, a top executive in an Indian telco pointed out.

Bharti chairman Sunil Mittal recently said in Davos that telecom sector’s fine story is over. But the second part of the story may have just begun. As some experts are arguing, the 2G clean-up was necessary for India at this point.