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Foreign telcos wary of India

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Foreign telcos want to foray into India but experiences of Vodafone and Telenor in the country have made them cautious, Melbourne-based Telstra Global’s Managing Director Martijn Blanken said.

If a telecommunications company “complies” with those Indian regulating authorities, then “it is fine”, he said.

“It is absolutely reluctance from foreign telcos to go in hard and deep. Every one wants to be in India, but what Vodafone has experienced and what Telenor has experienced are putting a bit of caution in the minds of foreign telcos, including ourselves,” he added.

British telco Vodafone is locked in a capital gains tax dispute related to its acquisition of Hutchison Whampoa’s stake in Hutchison Essar in 2007.

While the basic tax demand for the 2007 acquisition is Rs 7,990 crore, the outstanding dues, including penalty of a similar amount and accrued interest, run into Rs 20,000 crore.

The Supreme Court had ruled in Vodafone’s favour in 2012, saying the company was not liable to pay any tax over the acquisition of assets in India from Hong Kong-based Hutchison.

The government later in 2012 changed the rules to enable it to make retrospective tax claims on concluded deals.

In Uninor’s case, all its permits were part of 122 telecom licences cancelled by Supreme Court in February 2012. The Norwegian company was asked to buy spectrum afresh in November, 2012 to continue its operations.

These do not mean that Telstra Global is not going to be here in India, but how much “we are going to invest is something we will think about”, he said.

“Indian business climate is one that is something that we will be looking at very closely. For instance, in 2012, China approximately invested $ 57 billion in telecommunications infrastructure. In the same period, India invested only $ five billion in telecommunications infrastructure,” he said.

Telstra Global is the world’s ninth largest telecommunications firm with operations in 18 countries.

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