Pleased with its performance in the Indian market and describing the country as one of its most important investment destinations,UK-based Vodafone Plc would invest $3 billion in India over the next two years. This would be the group’s biggest investment comprising 15% of its global investment.
Speaking to a group of journalists on Wednesday evening,Vodafone Group CEO,Vittorio Colao said that the investment excludes the amount the company would spend in the forthcoming auctions to buy spectrum. He said that the proposed investment would be for network expansion,rural coverage and in enhancing data coverage.
Colao who’s currently in India and met the Finance Minister P Chidambaram on Tuesday declined to speak on the company’s vexed Rs 11,000 crore tax issue. All he said that he was grateful that the Finance Minister had found time to meet him. It is always good to have a dialogue between an enterprise and the policymaker, he said.
Vodafone,which in the past had expressed its dismay at the regulatory environment concerning the telecom sector,now sees clarity and certainty returning to the sector. There’s been progress in the regulatory environment. The recent decisions of the empowered group of ministers on merger and acquisitions is in the right direction and there’s a positive message to push forward the industry, Colao said while declining to go into the details of individual measures.
Speaking about the planned investment for the Indian market,Colao said that it was the biggest by the company. He said that India and Germany were the focus investment destinations for the company as there’s immense scope for data growth in India and Germany is a great economy.
The company,which has been the first to approach the Foreign Investment Promotion Board to increase its stake in the Indian venture from 64% to 100% since the government removed the 74% FDI cap in the sector,will not let its pending tax issue affect its investment plans for the country. Colao said that the plans for listing the Indian entity may be taken once the tax issue is resolved,indicating that it’s not a top priority at the moment.
Stating that the company was fortunate to have good partners in the country,Colao thanked Max Group chairman Analjit Singh for his contribution to Vodafone India. Singh is currently chairman of Vodafone India and has a minority stake of around 4-5%,which would be bought back by Vodafone once the FIPB approves its proposal to hike stake to 100% in the Indian venture.