Yet to hear from Indian govt on tax dispute: Vittorio Colao, Vodafone CEO

LONDON: Vodafone’s chief executive Vittorio Colao said the company has yet to hear from the Indian government about any proposal for a negotiated conciliation to resolve the telecom company’s long-standing tax dispute with the Indian government, while indicating that Vodafone would be keen to negotiate.

“We have heard about the change of position within the law ministry, but any conciliation will be an agreement to talk. I cannot predict where it will go. Of course, we are here to work and not to litigate. So, I cannot predict where it will go.”

While the idea of conciliation is very appealing — “we are here to work not to litigate” — Mr Colao was cautious about the outcome, saying that the terms of the conciliation would be the deciding factor, and that any agreement should benefit both parties, not just one.

At a time when Vodafone’s south European business is dragging down its performance, Mr Colao reiterated Vodafone’s commitment to the Indian market, where the company’s revenues grew by over 10% last year.

“Our margins in India are growing, not falling. I am very happy with our India team, it shows that a serious dedicated operator can do well,” he said. However, he said what is wrong with Indian telecom is a “negative, punitive approach to our industry,” and that is tarnishing the reputation of the sector in India.

First, there are issues like over-charging for spectrum. Then there is the issue of allowing too many players in the market and that has made a mess of it, he said.

Finally the sticking point is a lack of stability in the policy regime. “For instance, intercircle roaming was allowed, it was in the document — and then suddenly eight months later the rules changed. I hope officials start taking a long-term view of the sector,” he said.

India, along with other emerging markets like Turkey and Africa is now the second biggest chunk of Vodafone’s global business, about 30% of its revenues and its most profitable.

In India, Vodafone is focusing on rolling out its mobile-money business, and hopes to go national in a year or two. In Kenya, for instance, its mobile money business is 18% of Vodafone’s total revenue in that market. “India has 700 million unbanked people, imagine those shares in the Indian market,” said Mr Colao.