Vodafone India to invest $1 bn this year despite shaky environment

17 Apr 2013

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Notwithstanding uncertainties about spectrum and various tax cases against Vodafone India, the arm of UK's Vodafone Plc said today that it would invest another $1 billion in the country this financial year.

"We are committed and will invest another $1 billion in India in FY14 for capacity building," Marten Pieters, managing director and chief executive officer of Vodafone India, told newspersons at an event in Kolkata.

He did, however, indicate that the group would not continue to invest in India if it does not get returns from its investments.

Pieters said Vodafone India has invested Rs81,000 crore in acquisitions and another Rs55,000 crore in capital expenditure over the past six years, but the parent company has not got adequate returns so far.

"Is this fair?" he asked.

Asked about the 2G spectrum issue, he said, "We are ready to pay market related price." He elaborated that the price for the 900MHz band should be benchmarked to the1800MHz for valuation.

On the auction system for spectrum and licence allocation, he said, "We favour auction of unused spectrum, but not for spectrum which is already in use for existing operations."

The department of telecommunications (DoT) under the telecom ministry has declined to extend Vodafone's licences for the lucrative Delhi, Mumbai and Kolkata service areas, which are due to expire in 2014.

Asked what solutions the company wanted, Pieters said the government should not differentiate between 800MHz (CDMA) and 900MHz spectrum pricing and offer a level playing field.
He ruled out a public offer by Vodafone India unless uncertainties for the company end. "We all need a more favourable environment," he said.

Reacting to the Supreme Court's recent restrictions on sharing of 3G spectrum, he said, "We think we are entitled to roaming pacts, though the government clearly thinks that we are not. The matter is in court. Let's see how it unfolds."

He also said Vodafone is none too keen on rolling out 4G services in India soon.

"It's too early for 4G. This is a natural transition for 3G, but it also depends on the penetration of smart phones and spectrum allocation," Pieters said.

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