Sunday, March 27, 2011
Vodafone is having trouble in India.
India's market for cell phone users is on the up rise but taxes seem to be making it difficult for Vodafone to maintain profits. Profit per user are very small due to the scarce use of minutes and trouble with a lawsuit relating to tax troubles. Vodafone claims that they did not make a profit off of their acquisition so they should not owe taxes but the Indian tax authorities seem to disagree.
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I will have to echo Marten Pieters, chief exec. of Vodafone's Idia business; this hurdle is a result of developing in an emerging market. "If you don't have the stomach for that, please don't come."
This hurdle for Vodafone seems as if it will be temporary.
Massive foreign investment has brought India into relatively new territory, and this Vodafone roadblock seems to be evidence for that. India is certainly interested in Vodafone's business. But if Vodafone is forced to fork over billions, they may rethink how they invest in India.
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