Vodafone India CEO Marten Pieters rubbishes mandatory 2G biddinghttps://indianexpress.com/article/business/business-others/vodafone-india-ceo-marten-pieters-rubbishes-mandatory-2g-bidding/

Vodafone India CEO Marten Pieters rubbishes mandatory 2G bidding

Vodafone’s revenue market share at the end of Q3 FY13 was 21.3%,lower than Bharti Airtel’s 30.4%

Marten Pieters,CEO,Vodafone India,said on Tuesday he was uncomfortable bidding for 2G licences at the reserve price fixed by the government. Instead of the reserve prices fixed on the basis of the bids received in the 3G auction in 2010,Pieters said it would be a better idea to use the base price used for the 3G auction. Referring to the base price for the 3G auction held in May 2010,Pieters said: “That was a successful auction,no one complained about that price saying it was too low. You could use it as a starting point and see what happens.” Pieters added spectrum usage fees needed to be flat rather than being charged to the operator as a share of their revenues — right now,with the government charging telcos 8-10% of their annual revenues by way of licence fee/spectrum charges,a high entry fee would mean telcos would be left with low ebitda margins.

Referring to the 2G auction,Pieters said asking telcos to mandatorily participate in an auction was ‘a ridiculous thing’ adding the government’s idea of leaving the reserve price at a level where ‘just one player came in to buy’ defeated the purpose of an auction. Vodafone reported service revenues of R35,610 crore for the year to March 2013,up 10.6%,driven by an increase in mobile voice minutes and data revenue,but partially offset by the impact of regulatory changes. Vodafone India is the country’s second-largest telecom services provider by revenue and subscribers. Earnings before interest,tax,depreciation and amortisation (ebitda) stood at R10,640 crore,a rise of 24% from a year ago with ebitda margins expanding 340 basis points.

Pieters refrained from commenting on the government’s demand for R19,000 crore in tax and penalties over the 2007 purchase of Hutch’s Indian business,saying the demand was made on Vodafone Plc.

Pieters,however,said in the event of any money being paid,it would be done from the parent and therefore,it would not have any immediate impact on the capex plans in India. “These are separate issues. It’s a different bucket of money. It would be stupid not to invest in the business because you had to pay the government. Europe is not in good shape; so they need to look for other markets and India is big market and it still growing.”

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Vodafone’s revenue market share at the end of Q3 FY13 was 21.3%,lower than Bharti Airtel’s 30.4% but bigger than Idea Cellular’s 14.8%.

While the operator added just 2 million subscribers last year to reach 152.4 million customers at the end of March 2013,increased data usage and strong growth in voice minutes added to overall revenue growth. “The current subscriber base is healthier and multi-SIM concept has reduced,leading to improved usage,” Pieters said. The mobile operator’s voice revenues touched R27,592 crore,while data revenues were R1,998 crore in the same period.

The average revenue per minute (ARPM) Q4FY13 was stable at 44.4 paise while the average revenue per user was R194 compared with R180 in Q4FY12,higher than Bharti Airtel’s R193.