 "New government needs to rationalise taxation: Marten Pieters")
On the sidelines of the announcement of Vodafone India’s earnings, Managing Director and Chief Executive Officer Marten Pieters talks about his expectations from the new government and how he sees the company shaping in the coming years. Edited excerpts:
What are your key expectations from the new government?As a sector, telecom is heavily taxed. Operators end up paying 28-29 per cent of revenue in different taxes. This has to be rationalised. Once that happens, companies will actually be able to invest the money in fresh roll-outs and better service networks. The government should free more spectrum for commercial usage and auction it. E-governance is another important aspect the government should stress on.
Vodafone Plc has been fighting with the Centre on the retrospective tax issue. Do you expect the new government to settle this soon?
While I won’t be able to comment on this, as it is not dealt by Vodafone India, the fact is we have suffered due to an extremely aggressive tax collection system. This is not justified; it reduces the confidence of investors. If the new government brings back investor confidence with a rational tax collection system, it will be the best thing to happen.
We believe power supply is the best thing Modi will be able to ensure soon, considering the Gujarat model. This will be a great help to the telecom sector.
Vodafone has reported a net profit and data revenue is growing faster than expected. You have said Vodafone will roll out long-term evolution (LTE) or fourth-generation (4G) services in India on the 1,800-MHz spectrum band. When do you plan to start the commercial roll-out of 4G services?
It’s too early for 4G in India. We want to be ready for that technology in the future, but we have a long way to go with 3G services. We’ll start building the network for 4G next year. But commercial roll-out will take time.
Will 3G be your key focus in the coming years?
Yes. We will continue to look for more 3G spectrum, through auctions or possible trading and sharing, when regulations are in place. Ideally, we should have 10 MHz of 3G spectrum in each circle. Them, we will take steps for LTE services. We will continue to adopt alternative technologies to resolve spectrum scarcity.
The government has notified merger-and-acquisition regulations for the sector. Vodafone has been named a potential buyer for quite a few targets. Can a deal be expected soon?
We like to be a natural consolidator. However, considering the high debt of telecom companies in India, nothing really suits us at the moment. We will want to wait for regulations on trading and sharing spectrum. For instance, we will always be interested in 3G spectrum, across circles. And, this could come through many sources.
Few of your licences are coming up for renewal next year. Have you set aside funds for spectrum acquisition?
We'll take call on how to fund this at the right time. We have all the options - own cash flow, fresh equity and loans.