Vodafone CEO Vittorio Colao has described as “amicable” the current state of relations with the Central Government on the ongoing ₹20,000-crore tax dispute, and the international arbitration proceedings that Vodafone launched earlier this year.
“We have appointed our own arbitrator, they have appointed theirs, a third arbitrator will be appointed – it takes time…but it is very amicable…we are just following a normal process.”
Speaking at a press conference as the company released results for the first half of its financial year ended September, Colao welcomed as “positive” the Government’s reform plans.
“India is clearly indicating that they want to take steps to recover growth…we are pleased by this,” he said. “Clearly, there continues to be a need for simplification and tax certainty.”
In April, Vodafone filed the arbitration case against the Government, putting an end to the conciliation process over the tax demands relating to Vodafone’s 2007 acquisition of Hutchinson Telecommunication’s India operations.
While the Supreme Court ruled in Vodafone’s favour in 2012, the former government brought in retrospective changes that maintained the tax liability The board of Vodafone is set to visit India next year.
India proved among the stronger performers for Vodafone in a six-month period hit by challenging conditions in many European markets such as Germany, Italy and Spain.
India revenues upWhile organic revenues for the group fell by 3 per cent against the same period the year before (the decline has slowed), in India service revenue was up 11.7 per cent, driven by a sharp increase in data usage (up 94.6 per cent) as it took on more mobile Internet customers and extended 3-G coverage across urban areas (it increased the number of 3G base stations by 3,000 in the second quarter).
The company also saw strong growth of uptake of its M-Pesa mobile payment system, with 4 lakh active users and 79,000 agents.
“India is a great story for us,” said Colao. “I have always said that India has two engines of growth – the first engine is the demographics…and the other is – data in India – that shows that as soon as you put infrastructure in place latent demand is there.”