Vodafone Plc may have to shell out almost as much as it recently paid for buying 3G spectrum in India, following the Bombay high court judgment.
Although India is among the promising telecom markets for the world’s largest telecom service provider,the company has already spent Rs11,617 crore to acquire 3G spectrum across 9 circles in the country earlier this year.
Due to competition, Vodafone, like rivals, decided to cherry-pick telecom circles during the 3G auction, instead of seeking a pan-India sweep. And the company gave the broadband wireless aceess auction the skip.
In such a scenario, a tax outgo of Rs12,000 crore would impact the company in a big way, said an analyst, who did not wish to be named.
Besides the 3G payout this year, telecom players operating in India, including Vodafone, also have to bear extremely low average revenue per user or Arpu.
With the mobile subscriber base spreading to the rural and remote areas, Arpus have hit as low as Rs150 per month.
India is the only market in the world accommodating up to 8 telecom operators per circle, triggering an intense tariff war, which, in turn, puts pressure on telco margins.
Vodafone has confirmed that it has the option of moving the Supreme Court for an appeal.
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