It’S Not Nice To Say,but It Is Difficult To Do Business In India: Mart

[donganaaK]

T’S NOT NICE TO SAY, BUT IT IS DIFFICULT TO DO BUSINESS IN INDIA: MARTEN PIETERS  

Wednesday, 12 November 2014 | PNS | New Delhi

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Company reported an 11.7 per cent increase in its revenue at  Rs20,746.9 crore for the first half of fiscal year on the back of increased subscribers and strong data growth

At a time when most global companies wants to set its foot print in India, the country’s second largest telecom company Vodafone, which is facing taxation issues in India to the tune of Rs11,200 crore on Tuesday said that they are finding difficulty in doing business in the country.

The company that reported an 11.7 per cent increase in its revenue at  Rs20,746.9 crore for the first half of fiscal year on the back of increased subscribers and strong data growth said conditions for doing business in the country have not improved much in the last a few months but it is “hopeful that change will happen”.

The company had reported revenue of  Rs18,571.1 crore during the corresponding period last fiscal. “Its not nice to say, but it is reality. It is not like we said ‘its difficult to do business in India’, it is objectively difficult to do business in India..,” Vodafone India Managing Director and CEO Marten Pieters said.

Citing the example of 3G intra-circle roaming (ICR) pacts among operators, Pieters said the Government should have ended the matter when telecom tribunal TDSAT allowed them to continue with the arrangements, but the Government decided to do otherwise.

Pieters also cited the latest World Bank report wherein India has dropped by two places as compared to last year in the ease of doing business. India ranked 142 among the 189 countries surveyed for the latest World Bank’s ‘Ease of Doing Business’ report, a drop by two places from the last year’s ranking.

The data segment now contributes 13.5 per cent to service revenues of the company.  “We have delivered a healthy double digit revenue growth driven by strong customer additions and robust growth in data,” said Vodafone India Managing Director and Chief Executive Officer Marten Pieters. The average revenue per minute for the company stood at 49.9 paisa and average revenue per user at  Rs200.

The company reported a subscriber base of 174 million customers for the six months ending 30 September 2014, an increase of 11.8 per cent over the same period last year. Vodafone’s rural customer base was 92 million for the period-53 per cent of total customer base. Vodafone has a network of over 1,24,000 sites.

“With reducing inflationary pressure and improving sentiment after the new government came, we expect the telecoms sector to grow above the GDP rate,” Marten added. The earnings from data sales enabled the company to withstand seasonal pressures, as was the case for rivals Bharti Airtel Ltd and Idea Cellular Ltd.

Revenue from data browsing was  Rs2,552.5 crore for the six-month period, a 65.5 per cent rise over the same period last year, driven mainly by greater smartphone penetration (19.5 per cent of total base). The company made a capital expenditure of  Rs3,509.1 crore for the first half of FY15.

The British telecom major is facing a tax liability of over  Rs11,200 crore, along with interest, on its 2007 acquisition of Honk Kong-based Hutchison Whampoa’s stake in India’s telecom major, Hutchison Essar. The India unit is its subsidiary.

Vodafone India has moved the Delhi High Court alleging the Centre is indulging in “arm-twisting” and “coercive” tactics by refusing to sign its unified licence (UL) till it unconditionally accepts the “restrictive” clauses in the licence.

Vodafone India has slipped to the fourth position as a contributor to Vodafone Group’s revenue as Vodafone Italy has taken that position. Earlier it was on the third place. Asked about the reason for the slip, CFO of Vodafone India Thomas Reisten said that it was because of Vodafone’s acquiring more stake in Vodafone Italy.

Also, the Indian unit’s services revenue now do not include income from Indus Towers, an infrastructure joint venture between Bharti Airtel, Vodafone and Idea Cellular.

Overall, the UK-based Vodafone Group has reported a revenue of 20,752 million pound for the six months ended September 30. Vodafone Group plc is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world’s 2nd-largest mobile telecommunications company measured by both subscribers and 2013 revenues (in each case behind China Mobile), and had 434 million subscribers as of 31 March 2014.

Vodafone owns and operates networks in 21 countries and has partner networks in over 40 additional countries. Its Vodafone Global Enterprise division provides telecommunications and IT services to corporate clients in over 65 countries

 

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[timmy]

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