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Voda faced with $1bn bill for 2008 Indian spectrum purchase

Mobile News
November 26, 2010

Vodafone, already facing an unpaid tax bill of 2.5bn on the Indian sub-continent, also liable for £1bn for under-valued spectrum purchase in 2008

Vodafone and other network operators in India face paying the Indian government more than $1 billion each following an audit of now disputed mobile licence allocations, according to a source close to the matter.

Speaking to the Financial Times, two senior government officials said the companies were likely to pay for the alleged undervalued sale of second generation mobile licences in 2008.

“This is payback time,” one of the senior officials was quoted in the Financial Times.

“Those who were given more at less will have to pay something back to the government …the exact amount is being worked out, [Indian operators] BSNL, Bharti and Vodafone are the ones that benefited the most so they will pay the most.”

The comments follow a report by India’s national auditor which concluded the telecom ministry allotted spectrum to existing operators past the contracted limit but did not impose any upfront charges.

Telecoms minister Andimuthu Raja resigned over the matter earlier this month.

Vodafone would not comment on the issue.

There was uncertainty this week, however, around the logistics of such a repayment order.

Operator BSNL, the largest spectrum holder in India, has just gone cash negative, according to reports.

BSNL is owned by the Indian government, which is claiming repayment.

Vodafone has invested $11 billion into its Indian operations, and is already being pursued by the Indian authorities for a £2.5 billion in tax.

According to Indian authorities, the tax in question was not paid in 2007 when Vodafone bought out Indian operator Hutchison Essar.

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