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Vodafone India says IPO unlikely in 2012

Final rules on crucial airwaves auction awaited

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British mobile operator Vodafone's Indian unit may not go ahead with an initial public offering this year because of uncertainty over the rules and pricing of radio airwaves, its chief executive said.

India has started preparing its but a flotation this year is "highly unlikely" as the company awaits final rules on a crucial airwaves auction, Marten Pieters told reporters on Tuesday.

"We would also need some certainty around the valuation of the business, and of course, pricing and availability of spectrum is a very important issue for every operator," he said.

Carriers including market leader Bharti Airtel, and Idea Cellular oppose regulatory changes proposed last month, saying they will add billions of dollars to their costs and hurt profit.

The Telecom Regulatory Authority of India (TRAI) has proposed starting prices for a new airwaves auction that are nearly 10 times what companies paid in 2008.

The TRAI has also proposed refarming, or switching, superior-quality spectrum bands of established carriers such as Vodafone India with a relatively inferior band before their permits are renewed starting in 2014.

A panel of ministers has the final say on the auction rules.

"If we see the TRAI recommendations happen, then it for sure would be difficult to do this year," Pieters said of the planned IPO at a news conference to announce the company's earnings.

Vodafone has previously talked about the India IPO plans but has not set any definite timeframe.

Earlier on Tuesday, Vodafone said India revenue rose about a fifth to 321.84 billion rupeesfor the fiscal year ended March, while core profits from the operations grew 21.6 percent to 85.49 billion rupees.

Vodafone, the biggest overseas corporate investor in India, has grown fast since entering the Indian arena in 2007, but not without problems.

It took a charge of 2.3 billion pounds in 2010 due to fierce competition and escalating spectrum costs. The company also faces a tax bill of as much as 200 billion rupees, including interests and penalties, over its 2007 acquisition.

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