Indian telecoms industry is in a mess, says Vodafone India CEO

Indian telecoms industry is in a mess, says Vodafone India CEO

Marten Pieters, chief executive and managing director at Vodafone India, has told reporters that the telecoms industry in the country is “a mess”, due to too much competition.

Vodafone has been in a tax dispute with the Indian government for over six years, but is facing yet more delays as the two parties struggle to agree on terms.

“The telecoms industry, if you look at it from an international perspective, is a mess in India,” Pieters said at the Economist India Summit in Delhi yesterday. “It seems to come from the concept that has been developed in the past, that the more competition, the better.”

Pieters said that it was very difficult to do business in India and that the whole business process “can be made much easier, smoother by just removing a few things”.

Pieters believes that it is up to the Indian government to change and manage the industry system but he has seen “very little action” in that respect.

“The industry structure is a problem of the government... spectrum, our raw material, is in limited supply, so if you get too many players, you get this problem where nobody has enough spectrum,” he said.

He also compared India to the Chinese market which has the desired three-player structure, all of which are extremely profitable, he said, and offer low rates with far better infrastructure. China also invested $50 billion in its networks last year while India’s figure stood at $5 billion, he added.

There have been government initiatives in India to improve the market but Pieters said: “All those are great ambitions... the problem is about getting there. I see that in our industry the thinking about getting there is simply not there.”

In October last year, Vodafone pledged to invest $2 billion in buying out minority shareholders of its Indian subsidiary.

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