Vodafone under Home Ministry scanner

The Home Ministry has raised concerns about Vodafone and Verizon allegedly collaborating with the UK’s intelligence and security organisation, GCHQ.

“Leading telecom firms, including Vodafone and Verizon, are learnt to be secretly collaborating with UK’s GCHQ and passing on details of their customer’s phone calls, emails and other communication and are known as ‘intercept partners’,” said an internal note written in December sent by Ministry of Home Affairs to the Finance Ministry. Business Line has seen the note. Verizon recently announced a deal to acquire Vodafone’s stake in a US-based joint venture telecom firm. Verizon has separate enterprise services unit in India known as Verizon Data Services.

According to the MHA note, Vodafone has given GCHQ unlimited access to its networks secretly, which can potentially be used to tap into communication traffic from India. The note stated that the concerns were based on information published by various news agencies. While the Cabinet gave its approval to Vodafone’s FDI proposal to increase its stake in the Indian venture to 100 per cent in February despite these concerns, the MHA’s note has now been forwarded to the Department of Telecom for further action.

The MHA had also raised the pending tax issue and other alleged licence violations by Vodafone in its note. “Realignment of Vodafone India without settling pending tax issues which may have ramification on similar deals with other entities, is not advisable from economic angle. The Department of Economic Affairs may consider those facts while processing FIPB proposal,” the MHA had said.

Vodafone is involved in a ₹11,200-crore tax dispute for the 2007 Hutchison stake buy. The matter is sub judice after the company challenged the tax notice. In April 2013, Vodafone’s 3G roaming deal with Airtel and Idea Cellular was declared illegal. The Government has also raised a demand of ₹877 crore against Vodafone for allegedly under-reporting revenues during 2008-09 and 2011-12. Both cases are in courts.

Vodafone Plc’s official spokesperson did not immediately respond to these allegations, but a company statement said: “No such concern has been raised with us by the Indian Government. The Government of India’s approval of our FDI application states that it was cleared by the FIPB and CCEA after all necessary due diligence. Vodafone complies with the law in all of our countries of operation, including — in the case of our European businesses — the EU Privacy Directive and EU Data Retention Directive.

“Vodafone does not disclose any customer data in any jurisdiction unless — like any other operator — it is legally required to do so. Vodafone has never been accused of tax evasion. Vodafone’s businesses around the world paid more than £4.2 billion in direct taxes to governments in our countries of operation last year, plus more than £3.2 billion in other non-taxation-based fees and levies. Our businesses also made a total indirect tax contribution to national governments of £6.1 billion.”

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