Complexities, spectrum cost make India a difficult place:Colao

Complexities in India as also high cost of spectrum and taxes make the country a difficult place to do business, Vodafone Group CEO Vittorio Colao said today.
"The main problem of doing business in India is the cost of doing business in terms of spectrum, in terms of tax challenges, in terms of complexity but India is a great country," Colao told reporters here when asked about the Indian business environment.
He, however, added that India is "a great country" and is emerging as the second biggest market for Vodafone.
"Will it become our second largest country after Germany, I have no doubt. It will become. Whether it will become second most valuable country, no it depends on how country will manage," Colao said.

He said hurdles in running business due to different kind of permissions, litigations in India make things "very complicated."
"Look at spectrum, India needs spectrum as much as possible, give it and allow digitisation of rural area. What they seem to be doing is slice 5 (Mhz) here and 10 (MHz) there and a bit next year. Off course this is going to pushes up the price but does not favour investment, does not favour return. If you don't have return, you don't invest much," Colao said.

The government in spectrum auction starting March 4 has placed only 5 Mhz of 3G spectrum against a demand of 20 Mhz.

"I will say don't maximise price of spectrum but maximum investment," Colao said.
On government deferring GAAR for two years, Vodafone CEO said that it is the decision of India and "nothing makes me happy when I am in arbitration."
Vodafone is in tax dispute with Indian government amounting to about Rs 20,000 crore. Both the parties need to appoint third arbitrator to resolve the case but the deadline has been extending.
Colao said that he has not received any update from Indian government on appointment of third arbitrator.
"In India time horizon is expanded 4-5 years. So that's normal. We have patience."

Recently government decided not to appeal in the transfer pricing case it lost to Vodafone in the Bombay High Court which relates dispute amounting over a tax liability of Rs 3,200 crore arising out of differences in share valuation by the tax authorities and the company.
The Indian government is also considering various steps with a view to improving the ease of doing business index of the country.
The Indian arm of British telecom major Vodafone reported 17.7 per cent rise in revenue, the highest growth rate across its markets, raking up over 1.1 billion pounds during the quarter ended December 31, 2014 compared to revenue of 937 million pound in the same period a year ago.

Germany is top market for Vodafone in terms of revenue. The company reported 3.7 per cent decline in Germany revenue at 1974 million pound in October -December 2014 period.