‘Will­ing to Dis­cuss Tax Is­sue with Modi Govt’

Voda­fone Group CEO Vit­to­rio Co­lao says that the telco is open to an out-of-court set­tle­ment in the con­tentious tax is­sue that has strained its ties with In­dia’s pol­icy mak­ers

The Economic Times - - Companies - SUDESHNA SEN

The un­re­solved Voda­fone tax is­sue would be a great op­por­tu­nity for the new govern­ment to “make a state­ment on how open the coun­try is again”, chief ex­ec­u­tive Vit­to­rio Co­lao said, in­di­cat­ing that with a change of guard, the Bri­tish com­pany is open to an out-of-court set­tle­ment of the con­tentious tax is­sue that has mud­died its re­la­tion­ship with In­dia’s pol­icy mak­ers for seven years. Co­lao said while he is not “ex­pect­ing” any­thing from the new govern­ment, he is more than will­ing to en­gage in con­ver­sa­tion with it about set­tling the tax is­sue. “Our stance is never ad­ver­sar­ial. We will en­gage in any con­ver­sa­tion,” he said af­ter the com­pany re­ported its fi­nan­cial re­sults. “I have seen the pro-busi­ness, pro-re­form state­ments of the win­ning party. I am op­ti­mistic that the BJP will quickly do some­thing to re­store con­fi­dence in the coun­try. We have this (tax) is­sue which has been re­ally dam­ag­ing for the In­dian rep­u­ta­tion on the ta­ble, and maybe it’s a great op­por­tu­nity,” he said. Last month, Voda­fone filed for in­ter­na­tional ar­bi­tra­tion to set­tle the dis­pute, in what many saw as an es­ca­la­tion of hos­til­i­ties. While Co­lao is will­ing to talk, he’s also not budg­ing from his po­si­tion. “We have not made any pro­vi­sions for the ar­bi­tra­tion, be­cause we will win,” he said cat­e­gor­i­cally. “That is what all our In­dian and in­ter­na­tional lawyers have ad­vised us.”

set­tle the multi­bil­lion dol­lar dis­pute with In­dia

is never ad­ver­sar­ial

'In­dia story'; Al­ready picked up 7 m cus­tomers Separately in In­dia, the CEO of Voda­fone’s lo­cal unit, Marten Pi­eters, told re­porters that even leav­ing aside the main tax case, the coun­try’s No. 2 car­rier has “suf­fered clearly from ex­tremely ag­gres­sive tax collection sys­tem in the last few years”. “There are thou­sands of crores of ru­pees of tax claims on us which we think are not jus­ti­fied. They all end up in court, which is very time-con­sum­ing and costly, and very frus­trat­ing for all com­pa­nies,” he added. The tax cases notwith­stand­ing, the Voda­fone Group is up­beat about the per­for­mance of the In­dian mar­ket, which is the big suc­cess story in the com­pany’s global port­fo­lio. The com­pany is, as part of its Project Spring ex­er­cise, in­vest­ing around £1 bil­lion in the In­dian mar­ket on an-on­go­ing ba­sis, to im­prove 2G and 3G cov­er­age, as ser­vice rev­enue to 37,606 cr data cus­tomers to­talled

m tar­iffs ev­ery year but to keep it be­low in­fla­tion well as put in fi­bre-op­tic ca­bles.

“In­dia is a very good story,” Co­lao said, in an en­vi­ron­ment where the com­pany is fac­ing pres­sures in its home Euro­pean mar­ket. The big news in In­dia this year is in data growth; In­dia is the big­gest data user in Voda­fone’s port­fo­lio, and the CEO said it has around 30% smart­phone pen­e­tra­tion in cities. Data pro­vides 10% of Voda­fone In­dia’s ser­vice rev­enues, and it has al­ready picked up seven mil­lion 3G cus­tomers. An­other fo­cus area is Mpesa, its mo­bile fi­nan­cial ser­vice. “We have 65% cov­er­age of ru­ral ar­eas. Banks cover much less; we have over 56,000 agents.” MPesa has more than 1.1 mil­lion reg­is­tered cus­tomers in In­dia, and its most pop­u­lar ser­vices are money trans­fers and util­ity pay­ments.


Its stance

Up­beat about IN­DIA ARM'S SCORE­CARD In­dia Ac­tive To raise

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