Tax dispute side show, Vodafone here to stay: CEO Marten Pieters

Terming the tax dispute with the Indian government as a side show, Vodafone’s MD and CEO Marten Pieters in an exclusive interview with CNBC-TV18’s Shereen Bhan said that the company was here to stay in India.

“Vodafone has over and over said that we are here to stay. We are here to be one of the main telecom players in India. We love India. We have had a very good first few years here,” Pieters said in the interview.

The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Hutchison Whampoa’s stake in Hutchison Essar. Vodafone had earlier expressed keenness to reach an amicable settlement of the matter. Its India chief Analjit Singh had met Finance Minister P Chidambaram so as to settle the tax dispute through conciliation.

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Welcoming the TRAI’s decision to keep spectrum prices for 2G unchanged, Pieters said “It was not a surprise because TRAI came out with a very solid set of recommendations in the first place. This wasn’t the rebound so to say. So, we didn’t expect that TRAI in such a short time now would suddenly change its mind.

[caption id=“attachment_1190321” align=“alignleft” width=“380”]  Marten Pieters. Reuters[/caption]

Pieters further said that Vodafone will participate in the auction for 2G spectrum, which will be held in January 2014.

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“We will be there in the auctions. Vodafone was there in last auction. We were the only company that lost substantial spectrum while none of our licenses were cancelled. So we did it based on a business case. So, with lower spectrum pricing you can expect Vodafone to be there,” he said.

In a hard hitting response to the Telecom Commission’s reference to TRAI, Rahul Khullar has refused to make any alteration to either the base price for upcoming spectrum auctions for 2G airwaves or to any of the methodologies used in arriving at the price. The Telecom Commission had raised multiple queries over the method used by TRAI to recommend a substantial reduction in base price for upcoming auctions.

Last month, TRAI had recommended about 37 percent cut in base price for 1800 Mhz spectrum band compared to the reserve price in the previous auction. This is the steepest price cut so far after 122 telecom permits were cancelled by the Supreme Court and telcos obviously cheered this recommendation. For 900 Mhz, TRAI had recommended a reduction of around 60 percent but this price was calculated for only three circles.

Read the full interview here.