* Market turmoil yet to seriously hit results
* Crisis could hamper sales of certain add-ons
* Underestimated investor concern over India venture
* Relations with Alfa Group better but still eyes break
By Wojciech Moskwa and Joergen Frich
OSLO, Feb 11 (Reuters) - Norway's Telenor said increased emerging market currency wobbles and volatility may hurt its profits, although so far the global financial crisis has had little impact on its results.
"The currency situation is a concern. In particular at times like these when you see currencies of some countries crashing," Chief Executive Jon Fredrik Baksaas told Reuters on Wednesday.
"For a mature business that is basically more or less financed in local terms, it is (our) financial dividends that could be hurt when converted into foreign currency."
Telenor has 164 million subscribers from operations in the Nordics and across emerging markets in Europe and Asia, where it is the second largest foreign operator after Vodafone.
Baksaas said spending on mobile telephony was relatively insulated from the global crisis, even in some of the poorer countries where Telenor operates.
"We see that communication is important under any (economic) circumstances. It is part of daily life, for the rich and poor," he said in an interview. "Telco companies are often the builders and enablers of economic activity at the micro level."
"That doesn't mean we are not impacted by the crisis" if the longer-term picture showed slower economic growth, he said, adding that in the fourth quarter the crisis had little impact.
For a story on Telenor's results, click on
Baksaas said the crisis will not materially impact Telenor's drive to bring more sophisticated telecoms products to markets, such as mobile banking services. But it could slow expansion of other add-on services such as music downloads.
Baksaas said Telenor had underestimated investor concern over its venture into India, which resulted in the company dropping plans for a rights issue and opting to finance the deal with a mix of cashflow, debt and retained dividends.
Baksaas said it was "difficult to say" if investor confidence in Telenor has rebounded after issue plans were scrapped.
"I have learned that you never criticise the market, but you have to argue your case... I understand perfectly that investors were looking at dividends coming in according to our policy (and) now they see the dividend cut," he said.
Baksaas was upbeat about finalising the India agreement before the end of March but said he was "concerned" whether its Indian partner, the mobile arm of realty firm Unitech, would be able to secure necessary funds for the investment. This week, Unitech rescheduled some debt as property prices slumped.
He said if the India venture went ahead, Telenor would not be looking to enter other markets and may shed non-core assets.
"We are in the rainy season when it comes to valuations and they need to be fair, especially in the longer-term perspective, if we should entertain these kinds of questions (about shedding non-core assets)," Baksaas said.
He said relations between Telenor and Russia's Alfa Group, its main partner in Russian mobile group VimpelCom and Ukraine's Kyivstar, have improved but that a "separation" was still his preferred solution amid lengthy legal battles. Some analysts expect a share swap giving all of Kyivstar to Telenor.
"We would probably favour a separation solution with Alfa if done on fair valuations, but we are comfortable with the way that Kyivstar and Vimpelcom are now operating," Baksaas said. (Editing by Simon Jessop)