Vodafone to invest $3 billion in 2 years in India

The investment by Vodafone will be deployed for network expansion in rural areas of the country 

 

Vodafone, at present, is embroiled in nearly Rs.12,000 crore tax dispute with the government. Photo: Bloomberg

New Delhi: Notwithstanding its nearly Rs.12,000 crore tax dispute with the government, Vodafone Group Plc plans to invest $3 billion in India in next two years that will be deployed for network expansion in rural areas. Vodafone global chief executive, Vittorio Colao, however declined to go into the details of the “positive” meeting he had with Union finance minister P. Chidambaram on Tuesday on the tax issue.

“I am grateful to the finance minister for giving me time to meet him. It is good to have a dialogue between an enterprise and the policymaker. It is positive,” said Colao, but he parried a question whether Vodafone would be willing to pay up around Rs.11,200 crore income tax demand. He said Vodafone was incredibly positive about India not only from the business point of view but otherwise too.

Colao said in the next two years, Vodafone will invest $3 billion in India. “Our organic or real investment into the country is a significant $3 billion in two years...is the right decision,” he said making it clear that the tax dispute with the government is in no way upsetting their plans for India.

The CEO of the telecom major said he believed in India and also the data in it. After Germany, India is a priority market for Vodafone for long-term investments in technology and data, he added.

Colao said the proposed $3 billion investment excludes spectrum fee the company has to pay. “First, India has an opportunity for growth because of population and other factors. We will be long-term players. I’m happy we are here for long-term investment. I’m not here for four years but for 20 years and more,” Colao said.

To a question about the tax issue, he said it will not affect Vodafone’s hiring plans and investment and developing network in India. The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Hong Kong-based Hutchison Whampoa’s stake in India’s telecom major, Hutchison Essar.

NITESH KUMAR

PGDM 1ST

SOURCE--- LIVEMINT.COM