Vodafone India's plan to go for an initial public offering is making no headway with the continuing uncertainty around spectrum pricing and licence extension.
Speaking to Business Line, Marten Pieters, Managing Director and Chief Executive Officer, Vodafone India, said he was not too optimistic about a quick resolution of these issues which would pave the way for the listing.
“The IPO plan is not on schedule. We are stuck because there’s too much uncertainty and if we now skip a bit further then next year is election time. I am not too optimistic,” Pieters said when asked if the listing could happen this year.
There are two major regulatory issues that concerns Vodafone’s India operations. The biggest worry is the price it will have to pay for getting its licences renewed. Most of the 20-year licences given to the company get expired over the next 2-3 years. Under the plan being worked out by the Department of Telecom, operators will have to pay a market determined price for the spectrum they hold at the time of renewal.
In addition, the DoT has asked incumbent operators including Vodafone to give up 900 Mhz band so that it can be put for auction. Vodafone has filed an appeal in the Delhi High Court challenging this policy to shift out of 900 Mhz.
According to Pieters the IPO will happen if these issues are resolved quickly. “IPO could be done very quickly if the DoT calls us tomorrow and gives us reasonable terms for licence renewal. But do we have the confidence based on what we have seen in the past then I honestly I have to say I don’t have the confidence,” Pieters said.
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