Telenor's (TEL.OL) Indian cellular joint venture partner, Unitech Ltd (UNTE.NS), is "in principle" ready to sell its stake to the Norwegian company but wants a "fair" valuation, a source with direct knowledge of the matter said on Wednesday.

Separately, the Indian unit of the Norwegian state-backed carrier, among the companies set to lose their cellular licences after a court order, asked the Supreme Court to direct the government to hold 2G mobile spectrum auctions by June 2.

In early February, the Supreme Court ordered all 122 mobile licences awarded in a scandal-tainted 2008 sale, including 22 held by Uninor, Telenor's local joint venture, to be revoked in four months.

It asked the government to redistribute the licences and spectrum through an auction.

India's telecoms ministry said last month that it would take at least 400 days from February 2 to complete the auction process. The ministry has sought direction from the court on the timing of the auction.

"The auctions can and should happen by June 2. We don't think 400 days are needed," Sigve Brekke, head of Telenor's Asian operations and also managing director of the Indian venture, told reporters in New Delhi on Wednesday.

Brekke also said Telenor's Indian unit is suggesting that the telecoms regulator keep the base price in the 2G spectrum auction the same as that in the 3G auction of 2010, and wants the winners to be allowed to pay the bid price in phases.

Telenor owns 67.25 percent of the Indian joint venture, with Unitech, a real estate company, owning the remainder. Uninor ranks eighth in the market, with 41 million subscribers.

Telenor has said it would seek to move Uninor's business to a new company at a "fair market value." Brekke declined to comment on Wednesday when asked if Telenor was open to buying out Unitech from their joint venture.

Both Telenor and Unitech have approached the Company Law Board after the Norwegian company accused its partner of "fraud and misrepresentation" after the licence cancellation order and said it will migrate the business to a fresh venture to seek new licences.

Unitech has said Telenor cannot scrap the joint venture agreement unilaterally and that it has the right of veto in their shareholder agreement to block any asset transfer.

The company law board, a quasi-judiciary body, recently asked Unitech to tell it whether it wants to buy Telenor's stake in the joint venture or sell its own stake to Telenor.

On Monday, lawyers for Unitech submitted their proposals in a closed-door hearing. Both sides declined to comment on their proposals, citing confidentiality.

The next hearing in the case is scheduled for Friday.

Telenor paid $1.21 billion for about 67 percent of the joint venture, but last month wrote down about $730 million related to the operations after the Supreme Court's ruling.

Source :in.reuters.com