Vodafone's global investors get a taste of India

In its first global investors meet held in India, Vodafone on Thursday updated 60 of its global investors on the country's regulatory uncertainty.

The company said the one-nation, one-licence rule, and free national roaming are the biggest policy uncertainties for the sector.

Vodafone's brass, including chief executive officer Vittorio Colao, told investors roaming policy was applicable to its 3G licences, in spite of claims that it was not.

The company, which is already engaged in talks over the issue with the government, said it was ready to go to the Telecom Disputes Settlement & Appellate Tribunal, or even to the highest court, in case of an adverse decision.

However, it remains confident that the mergers and acquisitions rules and licence extensions may get finalised by early next year.

The event, which concluded on Thursday, gathers significance in the backdrop of Vodafone Plc's plan of listing its India subsidiary.

Colao earlier said the company would begin the run-up to an initial public offer this year end, if it got a favourable ruling on the tax dispute.

It, however, skipped the $2.6-billion tax dispute in its interaction.

Vodafone's India business moved to profits for the first time in four years, this May.

But the margin pressure persists.

The numbers in the presentation indicate a declining trends in key parameters such as average revenue per user, which stood at Rs 168,

in the second quarter.

Minutes of usage, which was stable at 308 for the last three quarters, went down slightly to 297.

The contribution of data to revenue, however, grew to 8.4 per cent, with 27.5 million active data users.

The company also talked about its distribution reach with 465 Vodafone stores, next only to Bharti Airtel. But it more than makes up with 7,125 mini-stores.

These stores claim to service over a million walk-ins, selling 33 per cent of total post-paid and eight per cent of pre-paid sales.

By generating close to Rs 650 crore (Rs 6.5 billion) operating free cash flow from India alone, Vodafone is also increasingly focusing on extracting more value from its data subscribers and mobile payment users, a service it pioneered in African markets such as Kenya.

Such events have so far been a showcase for many global fast moving consumer goods  companies such as Pepsi, Reckitt Benckiser and P&G who have, in the past, even brought down their apex executive boards to get a first-hand feel of the local operations.

For Vodafone, this was the first of its kind event hosted in India.

"We have had such events in Italy or London or in our headquarters in Newbury, but this time focus was on new growth markets. So, it makes sense to choose a new, yet, key location for a firsthand experience," said a senior Vodafone official.