Vodafone to spend $2billion annually to tap Indian telecom market

British cellular giant Vodafone plans to spend $2 billion annually to make inroads into the rapidly growing Indian telecom market, Chief Executive Arun Sarin said Monday.

British cellular giant Vodafone (News - Alert) is gearing up to begin making major infrastructure improvements in the exploding Indian telecom market, the company said.

Arum Sarin, executive, said the company plans to spend $2 billion a year on the project, which will include building mobile towers to extend users mobile reach on the vast country. “Since our entry into India, our capital expenditure has doubled. We are now spending $2 billion a year,” Sarin told media in New Delhi.

Vodafone is currently in discussions to share infrastructure improvements, including the mobile towers, with companies like Bharti Airtel, India’s largest private-sector mobile company. “We are looking at ways to piggyback on each others’ infrastructure to reach out to the masses quickly,” Sarin told reporters, according to Reuters.

The company has recently been on the move in the country, which industry insiders see as a huge market waiting to be fully tapped. In February the company agreed to buy Hong-Kong based Hutchison Telecom   – a prime player in the Indian market.

Earlier this week, according to The Business Lin, companies including Vodafone Essar, Bharti and Idea Cellular are in talks to merge their tower businesses. However, Sarin said the companies hadn’t finalized any deals.

The move into this market has been speeded up as of late as more and more citizens are adding to the growing mobile market. In August alone, an estimated 8 million people become mobile subscribers, according to government figures. And market penetration rates are still relatively low at less than 20 percent.

Vodafone has 34.1 million mobile subscribers in the country, while chief rival Reliance Communications had 34.8 million; the overall mobile market is estimated at over 200 million users.

The picture hasn’t been all rosy in India for Vodafone.  Vodafone continues to argue is in court with the Indian government over a $1.7 billion capital gains tax bill served to it from the sale of Hutchison’s stake, according to reports.

Source: TMCnet