Would love to list but time is not yet right: Vodafone CEO

Vittorio Colao, Vodafone CEO   | Photo Credit: R_V_Moorthy

Vodafone Group CEO Vittorio Colao says that he would love to list in India but the time is not yet ripe for it. There are too many uncertainties surrounding the business and a period of stability is required before listing could be considered.

“To be honest, I would love to list Vodafone India. We’ve been talking about it and I’ve had banks knocking at my door but my answer is: at the right moment and under the right conditions we would do it. There are so many uncertainties over extension of existing spectrum licences, new auctions, M&A rules… The last thing I want is to do a listing of Vodafone India and then see the stock price go down,” he said over lunch with a group of editors here on Wednesday.

It is not just about doing the right thing for Vodafone but for Indian people who would buy shares in the new company with uncertainties that they are incapable of judging. Pointing out that there were too many players returning too little on capital invested, Mr. Colao argued for consolidation: “You don’t need more than four players; no country in the world has more than five players and usually the fifth is up for sale.”

He said that Vodafone was open to looking at consolidation but it must make sense from a financial point of view. “We cannot throw away money for the sake of consolidation. I’m not obsessed about buying in India,” he said.

He ducked a question on the talks with the Tata group for acquisition of stake in Tata Teleservices saying: “If you want to follow everything I do personally, follow me on Facebook!”

He also dismissed the emerging threat through the 4G foray of Reliance saying: “I wish Reliance full success, we will be great competitors and I’m not worried by Reliance.”

Mr. Colao pointed out that Vodafone had a “fantastic 3G operation with over 60 per cent growth in data business” and that 4G in India was more about capacity than speed. “I was browsing the web from my car this morning and the speed was good. You can do most of what you need today in 3G.”

Without going into details on the arbitration over the Rs.20,000 crore retrospective tax dispute with the government, Mr. Colao would only say: “There is an arbitration process and within that anything can happen. It is an established process and will take whatever turn it has to take.”

Answering a question on whether he was disappointed with the budget not rolling back the retrospective tax, Mr. Colao quipped: “I’m old enough to understand that you should not look at statements but at action. I was not disappointed and I’m waiting like many international investors to see the new India in practice and action. There is this myth of the first 100 days; it’s the first 1000 days that really matter.”

It was clear from the interaction that the upcoming spectrum auction and the renewal of licences in some big circles was occupying more mind space for Mr. Colao and his leadership team than the tax issue. Vodafone is in danger of going out of business if it fails to secure renewal of the licences in circles such as Gujarat that are critical for it.

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Printable version | Oct 27, 2021 4:55:52 PM |

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