‘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 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.
VODAFONE SAYS Hopes to
Upbeat about INDIA ARM'S SCORECARD India Active To raise