Vodafone share price: Company preparing for Indian IPO

Finance minister Arun Jaitley told Vodafone Group CEO Vitorrio Colao that if he sees an important number on the screen of his mobile phone, he uses the landline to return the call. The company has been considering an Indian IPO for several years but has held back because of regulatory and tax issues in the country.

On the tax issues the group is facing in India, Colao said, “We welcome the recent outcomes of other tax cases”. The share sale will also offer investors an opportunity to reap dividends from a market where wireless growth is outpacing that of more mature countries such as Vodafone s home market, the United Kingdom.

Raising the issue of the High Court judgement in its favour in the Rs 8,500-crore case, the Vodafone Group CEO sought the government’s view on whether it would appeal against it. He also said the main tax dispute relates to the Rs 20,000 crore tax and penalty raised on it for not withholding tax when it bought majority stake in Hutchison Essar, while expressing his desire to settle with the government, without having to pay penalty and interest.

On Indian IPO, Mr. Colao said no date was available yet though the company was positively inclined. Refusing to give a timeline, he said, “it’s very hard to give you date as many things can happen – financial markets, price, anything can happen”.

The court backed Vodafone’s efforts to oppose a move by tax authorities to add Rs 8,500 crore to the taxable income of a unit, Vodafone India Services Pvt Ltd, which provided call centre services to a few group companies. The company so far has made investments of around Rs 80000 crore in India and invest about Rs 8500 every year, said Colao. Which operator would like to give bad services to its customer? He has publically stated that EMF is myth. That’s very positive for us. He said call drops can’t be resolved just by increasing investments because that’s not really the cause. Calling on the government to allocate more airwaves, Colao said India has maximized a lot of revenue out of spectrum auctions by offering low quantities of the natural resource.

Colao said the spending for such purchases would “depend on negotiations”. He added that affordable bandwidth will allow telcos to invest more in technology, which will improve data speeds and quality of services, which will ultimately boost Prime Minister Narendra Modi’s vision of a Digital India. We are the digital planners.

In addition, the company acquired spectrum for about Rs 25,959.74 crore in March and has plans to expand 3G service network from 9 circles to 16 circles.