Vodafone Pledges $2 Billion Investment Into Vital Market, India

Leading global telecom firm Vodafone said it would invest $2 billion in pursuing new business initiatives and to augment existing capacity in its key market, India. The announcement came after a meeting between Vittorio Colao, CEO of Vodafone Group Plc, and India’s Prime Minister Narendra Modi in London on Thursday, the first day of the Indian Prime Minister’s visit to Britain.

Other than the Vodafone pact, India has signed five other deals during the official visit, including in clean energy and financial services. Despite the political troubles at home and the recent crushing defeat in the regional elections in the northern state of Bihar, Modi is determinedly pushing ahead with his agenda of promoting his government as a business-friendly one to overseas investors.

The upcoming projects out of these new deals include the country’s first Madame Tussauds scheduled to open in 2017 in Delhi, a LEGOLAND and a King’s College Hospital in the northern Chandigarh city.

Vodafone’s own investment will go towards upgrading and expanding its network, setting up data centers and augmenting technology in tune with the government’s ‘Digital India’ and ‘Make in India’ programs. It will add 15,000 employees in the next two years, the company said.

Vodafone, currently India’s second-largest mobile operator by number of users after Airtel, launched its India operations in 2007 and has since invested about $17 billion in the country, making it the largest foreign direct investor into the country. India is a key market for Vodafone and accounts for the Group’s highest growth by revenues. It is the Group’s largest data traffic market by volume and is the third largest market in the Group by service revenues. Vodafone India has been quoted as saying it is exploring an IPO in the country next year.

Meanwhile, Vodafone has been embroiled in a high-profile $2.5 billion tax dispute with India’s tax authorities over its purchase of Hutchison Essar Telecom Services in 2007. Indian taxation officials ruled that the transaction involved purchase of assets of an Indian company and was liable to be taxed in India. But in a recent development, the government said it is open to an out-of-court settlement in the tax case where arbitration has already been initiated.

In London yesterday, in a statement during the prime ministerial visit, Colao said Vodafone is enthused by India’s ‘Digital India’ and ‘Make in India’ initiatives and wants to partner with the government on these. Vodafone already has 188 million subscribers in the country of which nearly 100 million are from rural areas. Over $1 billion of the new investment will go towards enhancing, upgrading and expanding network to align with ‘Digital India’ and the rest towards upgrading technology centers and customer service centers under the ‘Make in India’ program. Vodafone M-Pesa Ltd, the company’s digital wallet service, which has recently received a payment bank licence from India’s Reserve Bank will invest in financial inclusion.

Source:- Forbes

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