Vodafone to invest $3 billion over 2 years in India

 
Notwithstanding its nearly Rs 12,000 crore tax dispute with the government, Vodafone plans to invest $3 billion in the next two years that will be deployed for network expansion in rural areas.

Vodafone global CEO Vittorio Colao, however, declined to go into the details of the "positive" meeting he had with Finance Minister P Chidambaram on Tuesday on the tax issue.

"I am grateful to the Finance Minister for giving me time to meet him. It is good to have a dialogue between an enterprise and the policy maker. It is positive," Colao said, but he parried a question whether Vodafone would be willing to pay up around Rs 11,200 crore income tax demand.

He said Vodafone was incredibly positive about India not only from the business point of view but otherwise too.

Colao said in the next two years, Vodafone will invest $3 billion in India.

"Our organic or real investment into the country is a significant $3 billion in two years... is the right decision," he said making it clear that the tax dispute with the government is in no way upsetting their plans for India.

He said he believed in India and also the data in it.

After Germany, India is a priority market for Vodafone for long-term investments in technology and data, he added.

He said the proposed $3 billion investment excludes spectrum fee the company has to pay.

"First, India has an opportunity for growth because of population and other factors. We will be long-term players. I am happy we are here for long-term investment. I am not here for 4 years but for 20 years and more," Colao said.

To a question, he said the tax issue will not affect Vodafone's hiring plans and investment and developing network in India.

The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Honk Kong-based Hutchison Whampoa's stake in India's telecom major, Hutchison Essar.

Vodafone bets big on India 3G, to invest Rs 7,100 cr

 
Vodafone has drawn up ambitious plans to invest 700 million pound ( about  Rs 7,100 crore) in India during the next 2- 3 years mainly on rolling out 3G networks.

This amount will be in addition to  Rs 4,000- Rs 6,000 crore annual investments the company has been making in recent years, Vodafone India CEO Marten Pieters said on Tuesday.

The investment will be part of the cash- rich British company's Project Spring under which the Vodafone Group will invest 7 billion pound by March 2016, to establish stronger network and service differentiation in major global markets.

"The Indian investment is about 10 per cent of pound 7 billion in the next 2- 3 years. It depends also on what is available. The investment will be above the normal level of investment we would have done so it's like a catch up investment," Pieters said.

Riding on a strong growth in data usage and voice calls, Vodafone India said it has posted 13.5 per cent jump in revenue at  Rs 20,476.3 crore for the first half ( April- September period) of 2012- 13.

The company had logged Rs 17,581.3 crore in revenue during the same period in the last fiscal.

Pieters said, India has become the third largest contributor to the UK- based Vodafone Group's services revenues.

" We are also focused on growing the use of mobile Internet. Our data continues to contribute strongly to business, accounts for 9 per cent of service revenue in Q2, 2013- 14 fiscal," said Pieters.

He said most of the subscribers in India would use  Internet via mobile phones but the company doesn't have 3G spectrum in all the circles.

"We will try to get spectrum in all the circles next year. We count on pending approval for spectrum trading and the fresh 2100 Mhz auction in 2014," he pointed out.

On revenue growth, he said it is driven by hardening of rates, exponential growth in data and good subscriber base. "These, however, were partially offset by the effect of seasonality and regulatory changes," he added.

"The service revenue has grown 13.5 per cent to Rs 18,481 crore during the 6- month period from  Rs 16,282.6 crore in the corresponding period last fiscal, but our data revenue has grown much faster at 76.5 per cent. The data growth has been driven by high smartphones usage, he added.

Vodafone India's operating profit or EBITDA ( earnings before interest, taxes, depreciation and amortization) improved by 30.6 per cent to  Rs 6,519.1 crore in H1, 2013- 14, compared to  Rs 4,993 crore in the same period of last fiscal.

Pieters said the environment in the country is more positive these days as the regulatory clarity is emerging. However, at the same time he pointed out that that all is still not fine on the regulatory front.

Meanwhile, Vodafone Group chief Vittorio Colao at a meeting in London on Tuesday said the company will only consider an IPO in India once the $ 2- billion tax dispute is resolved.

"We don't have to do it… because we don't need the money. We need to resolve the tax issue first," said Colao.

Colao added that there was " no real change" to discussions on the tax dispute. " We have had talks and continue to have talks. It's complicated and honestly, we have to see where it goes."

Vodafone posted a 13.5% jump in revenue at  Rs 20,476.3 cr for the first half of 2012- 13.