Vodafone India has been ordered to pay 20 billion rupees (€282.4 million) by India’s Supreme Court to merge several of its operating subsidiaries.
The Economic Times reported on Monday that the fee, payable to the Department of Telecommunications (DoT) in return for a merger licence, takes the telco a step closer to launching an initial public offering (IPO).
Vodafone operates in India via several subsidiaries. In 2012, with its eye on an IPO, Vodafone embarked on a plan to merge Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services. It also sought to merge Vodafone West and Vodafone Spacetel with Vodafone Services.
However, weak market conditions and the small matter of a INR200 billion tax dispute with the government led Vodafone to shelve the plan.
The plan was revived in 2013, but then the DoT demanded Vodafone pay INR69.3 billion in various spectrum fees, including converting licences held in all telecom circles into unified licences.
Vodafone refused to pay the full amount, but offered to pay a INR17.7 billion fee comprised of INR10 billion to convert its permits into unified licences and a further INR7.7 billion to extend the term of its Chennai licence – which was due to expire this year – to 2021.
The dispute was taken to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), which in late October this year sided with Vodafone.
The DoT challenged the ruling in the Supreme Court, which, according to the ET on Monday offered Vodafone India a choice of either paying INR20 billion outright, or paying INR17.7 billion and explaining exactly why it disputed the INR69.3 billion demand.
According to the report, Vodafone chose the first option over fears the merger process would be further delayed.
The development comes after Vodafone revived its plan to launch an IPO in India.
In October, Vodafone CEO Vittorio Colao revealed that his company had begun preparatory work on an offering, but declined to say when it might take place.
