 "The data opportunity is immense: Vodafone India MD & CEO")
UK-based telecom major Vodafone has to write down 5 billion euros for its India operations but despite this Vodafone India continues to be one of its fastest growing subsidiaries. Vodafone India Managing Director and Chief Executive Officer Sunil Sood spoke to Kiran Rathee on a host of issues concerning competition and the roadmap for the company. Edited excerpts.
Have the Indian operations become a liability for the group?
The impairment charge of 5 billion euros is a shareholder issue, not an Indian balance sheet issue. There has though been a lot of volatility in the Indian market because of a new competitor (Reliance Jio) and this volatility will accelerate consolidation. In the long term, there is enormous potential for growth, which is revealed by the latent demand in the free offer our competitor is running--the data being consumed tells us there is potential.
We are strongly positioned to benefit from this, especially after the latest spectrum auction where we were the largest bidders. Now we are covering 91% of our revenue market and 95% of our data market with 4G.
Is Vodafone open to acquiring a smaller player?
We are open to the right business case, whether it is spectrum sharing, auction, acquisition or merger. If we think the opportunity is right, why not?
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India used to be among the fastest growing markets for the group. Has competition changed that?
We have grown at 5.9%, year on year, in the first half of the year and. We are the third biggest contributor to the group’s revenue. We remain the group’s second fastest growing market.
Do you see a bias in the penalty on Vodafone and other telecom operators for not providing enough interconnect points to Reliance Jio?
We have always been a responsible operator. This is not the first time a newcomer has entered the market. In 2008-09, there was a series of new launches. At that time too we provided interconnect points to all. We have given enough interconnect points to Jio but they are having problems activating these points.
As far as the Telecom Regulatory Authority of India and the department of telecommunications are concerned, we have stated our views and are expecting a fair response.
Do you see the softening of data growth normalising in a few quarters?
Our data growth has been 35%, year on year. It is not a bad rate and we see the potential to move faster.
Do you see Reliance Jio as the biggest disruption in the Indian telecom market?
Pricing is not a long-term differentiator. Whenever a new player enters, there is short-term disruption, but we have to see the opportunities and there is an immense data opportunity.
Your take on the demonetisation of high-value currency notes...
The Digital India framework as well as demonetisation will benefit the telecom industry.