Vodafone has been pursuing the tax dispute with Indian tax authorities for long. It was served with multiple notices by the tax department regarding transfer pricing issues as well. Vodafone even stressed that it may invoke the option of invoking an international arbitration in this regard. The Bombay High Court has already dismissed Vodafone’s plea in the transfer pricing case.
Among all these developments, the Vodafone Group has recently taken complete ownership of its India telecom venture Vodafone India Ltd. (VIL), by buying out minority partners Piramal Enterprises, and Analjit Singh and Neelu Analjit Singh stakes for a combined Rs10,142 crore.
Vodafone Group initially bought the 24.65% indirect stake in VIL held by Analjit Singh and Neelu Analjit Singh in March 2014. Now the group has also bought the remaining 10.97% stake of VIL from Piramal Enterprises. The Foreign Investment Promotion Board (FIPB) approved both acquisitions following receipt of the approval of the Cabinet Committee on Economic Affairs.
The regulatory environment for telecom sector of India is fast changing to the betterment of various stakeholders. Firstly, the electronic system design and manufacturing policy of India has been liberalised. The FDI Policy in Telecom Sector of India 2014 (PDF) has allowed 100% FDI subject to FIPB approval and other national security requirements. Similarly, approval to establish two semiconductor wafer fabrication manufacturing facilities in India (PDF) has also been granted by Indian Government.
Secondly, the telecom merger and acquisition guidelines of India 2014 have also been released. This would allow more telecom companies to compete against each other and provide better services to the consumers. This would also require compliance with various techno legal compliance requirements by both national and international telecom companies.