Vodafone to invest more in India, rules out Airtel stake sale

NEW DELHI: Vodafone���s global CEO Vittorio Colao on Monday said India must offer increased clarity on its foreign direct investment (FDI) policy across sectors. ���The FDI policy in India is complex and lends to multiple interpretations,��� he said at a CII conference.

Mr Coloa refused to elaborate on the specific modifications he wanted in the country���s FDI policy. Regulatory clearances for Vodafone���s acquisition of Hutchison���s operations in India in 2007 were delayed for several months as the deal was embroiled in a controversy over violation of FDI norms.

Mr Coloa also said FDI flows to China were four times higher than that in India. ���If India wants to maintain 8% growth rate, it will have to win the competition for global investment. Increased FDI means, better products and services and creation of more jobs,��� he said.

Vodafone offers mobile services in India in partnership with Essar group and is the second-largest GSM operator here with over 60 million customers. Mr Coloa also said that India is different from all other markets as it adds between 8-10 million new mobile users every month. The company is launching operations in B and C circles where Vodafone is not present. These circles have a population of 300 million, equivalent to that of Pakistan and Bangladesh combined.

���Vodafone is committed to investing in India to expand its operations,��� he said. He said Vodafone had no plans to sell its 4% indirect stake in Bharti Airtel. But he did not comment on the deal of 3G auctions in India and the finance ministry���s demands to hike the base price for 3G spectrum.

The Vodafone CEO also expressed concern over spectrum allocation policy in India. He pointed out that globally, operators had between 15-20 Mhz of spectrum, while India still debated if telcos should be given radio frequencies beyond 6.2 Mhz. While most markets abroad have 3-5 operators, radio frequencies in India are divided between 10-12 players. Mr Coloa said the allotment of spectrum in India was too little. This in turn forced telcos to compromise on service quality.

Mr Colao said Indian states which had a higher degree of mobile penetration were growing faster. Mobile growth in India accelerates after penetration touches the 25% mark and the country therefore had to build more networks to facilitate this growth.