Vodafone is facing a number of hurdles in India but the British company is betting big as a long term player.
The company is investing nearly $3 billion over the next two years in India in expanding its network infrastructure and distribution channel in the country. Vodafone Plc’s CEO Vittorio Colao during his visit to New Delhi spoke to media on the company’s plans.
Edited Excerpts.
There is progress in the regulatory environment. There are more reasonable expectations and it sending positive signals.
I am more convinced that our decision to increase organic investment to $3 billion over next two years is a right decision. It’s going to be used for improving rural coverage, data network and strengthening distribution and retail. I believe in Indian market and we are preparing for an important phase. India is one of the two biggest markets for us along with Germany.
What makes you so bullish about India despite issues like the tax dispute coming in your way?
India’s data story is very promising. There are very few who use 3G data today, there is going to be massive change. I had meetings with several government officials here and I have told them that I trust in this market and we have long-term plans. Vodafone will be here for 20-30 years or even more.
Now that you have clarity on issues like spectrum pricing, will you list the Indian unit?
Complete clarity is still not there. For example, we have to get clarity on spectrum usage charge, we also have the tax case pending, and we are awaiting approval for our proposal to increase stake to 100 per cent. I don’t have a timeframe but once all these things are clarified we will consider listing.
Is the worst of over in terms of regulatory uncertainty?
We see encouraging signs.
The Government has cleared the Mergers & Acquisition policy. Will Vodafone look at M&As in India?
I cannot tell ahead of time. If there is an opportunity, we will look at it, but for the timing we are focussed on getting FIPB approval for 100 per cent stake.
How important is the Indian operation for you?
I remember when I was appointed CEO, India was not among our 6 top countries. Then India became part of top 6, now it is among the top two. India is a place for investment and innovation for Vodafone.
How close are you on settling the tax issue?
I don’t want to comment on the tax case
Why is Vodafone still No. 2 in the Indian market?
Ans- This is a sector where you don’t gain market share by 5-6 percentage points. This is sector where you gain share by one per cent maximum. We were a No. 3. So we have progressed to being No. 2. I don’t believe in the myth of being No. 1 for the sake of chest beating. I want to make money and I want to build a great brand. That’s what we are doing in India.
How was your meeting with Finance Minister?
It was great that FM gave us time. It’s good that enterprise and public policy makers should have a dialogue.
Will you allow the tax case to be a legacy issue?
I am not allowing the tax case to interfere with my decision on how much we invest and how many we hire in India.
A good investor like Vodafone considers long-term opportunities. There could be disputes and other challenges in the short term. It doesn’t change my intention to have a great Indian company.
Given the new rules on cross holding, what do you plan to do with your stake in Bharti?
We continue to hold it and some day we will get good value for it. We will find a solution. We don’t have a buyer right now.
thomas.thomas@thehindu.co.in