Telecom in India a mess, says Vodafone CEO

Written by ENS Economic Bureau | New Delhi | Updated: Sep 12 2014, 21:01pm hrs
Vodafone india CEOIt's difficult to do business in India, that's the general perception I think of foreign firms, says Vodafone India CMD Marten Pieters.
Multinational companies operating in India are still waiting for acche din (good days) with Vodafone India CEO & MD Marten Pieters on Thursday saying it's difficult to do business in the country even as he urged the government to quickly address the challenges.

The telecom industry, if you look at it from international perspective, is a mess in India ... and it seems to come from this concept which has been developed in the past that the more competition, the better, he said at the Economist India Summit.

The process for doing business in India can be made much easier, much smoother by just removing a few things, he said. Vodafone is the second largest telecom company in the world.

"...it is difficult to do business in India, that's the general perception I think of foreign companies and that is not just in telecom," said Pieters.

His sentiment was shared by Sashi Mukundan, regional president and head of country (India) BP Group, who expressed frustration over the gas price deadlock. We have had to hold on to $4 billion of investments due to (the) gas price uncertainty. We are looking forward to the report on September 30, he said at a discussion on What business needs: Foreign companies speak.

Pieters blamed the government for hoarding spectrum while investing too little in telecom infrastructure. "Spectrum, which is our raw material, is limited...most companies have a quarter of the spectrum that normal operators have in other countries, he said.

Noting that though industry structure is the government's responsibility, he said I see very little action to take this responsibility.

Asserting that it is difficult to do business in the country, Pieters pointed to his own company that has been waiting for a clearance from the Advance Ruling Authority before bringing in funds from the parent company to buy airwaves.We filed an application in December last year, but have received no answer till now, he said, stressing that the government needs to do its job. I have no answer, I got to know last week that the officer dealing with the file has retired, he said.

Pieters also raised the issue of the new Companies Act. We have very good independent directors. But under the new law, we can't pay them (beyond a certain level) as we are a loss-making company. So, what do we do ...this is just nonsense, he said.

He, however, admitted that it is too early to judge the new government in its first 100 days. It is ridiculous. Let's judge them after 12-18 months, he said.

But he noted that the ICT initiatives announced by the government are not new and the National Telecom Policy 2012 was full of such concepts. All those great ambitions...the problem is how do you get there. What I have seen in our industry is that the thinking is simply not there on how you get there," he said.

Cai Liqun, chief executive officer, Huawei Telecommunications (India), said that the new government must work hard to motivate the industry. Banmali Agrawala, president and CEO (South Asia), General Electric, concurred that the government must restore its credibility and "move away from focussing on just one individual to team play".