Oslo - Norwegian telecommunications group Telenor shares dropped Wednesday after the group unveiled plans to expand into India in connection with its third-quarter report.

The group's share price was off some 15 per cent at midday on the Oslo bourse, since the Telenor management said it would need a cash injection of 12 billion kroner (1.7 billion dollars) for the pending expansion into India.

Telenor planned a rights issue - a way of issuing new shares - next year, chief executive Jon Fredrik Baksaas told analysts after announcing that Telenor had signed a deal to secure a 60-per-cent controlling stake in Indian group Unitech Wireless.

The deal, subject to approval from regulatory authorities, was worth 1.07 billion dollars. Baksaas told analysts Telenor expected "the closing to take place later this year."

The Norwegian government, majority-owner of Telenor, said it was "positive to participate in the rights issue," Trade and Industry Minister Sylvia Brustad said in a statement.

Third-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were 10.03 billion kroner (1.44 billion dollars), compared to 9.48 billion kroner in the corresponding business period of 2007, the group said.

Sales were up 4 per cent year-on-year to 27.6 billion kroner, the group said, while profit after tax dropped from 5.09 billion kroner to 2.99 billion kroner, the group said, without detailing the drop.

The pro forma figures included earnings from its company Kyivstar in Ukraine, where Telenor has been engaged in protracted measures to get audited financial information about the operator.

Earlier, Baksaas said Telenor had 159 million mobile telephone subscriptions at the end of the quarter.

Baksaas said the business environment was "more turbulent" but noted that while telecommunications services were "not immune" they were somewhat more stable compared to other services.

Business in Pakistan had slowed over political and economic events, but Telenor hoped it would pick up.

In its Norwegian home, Telenor had 54 per cent of the mobile market, and 61 per cent of the fixed-line market measured in traffic minutes.

The group kept its earlier outlook of 3-per-cent revenue growth for the year.

In addition to Norway and neighbouring Sweden and Denmark, Telenor has operations in Hungary, Serbia, Ukraine, Montenegro, Pakistan, Thailand, Malaysia and Bangladesh. (dpa)