Vodafone India, the local arm of the British mobile giant, may not launch its planned initial public offering this year due to uncertainty over the pricing of airwaves, its chief executive said Tuesday.
"It is highly unlikely that we will go in for an IPO in the middle of so many spectrum auctions," CEO Marten Pieters said, while announcing the firm's standalone earnings for the first time.
"We had started IPO preparations but there is much uncertainty around spectrum allocation and pricing," he told reporters.
"We have not taken it (the IPO) off the table. Ultimately, it is a shareholders' decision, but it is important to get timing right," Pieters said.
The announcement comes as the domestic telecom industry fears that proposals for a sharp hike in the price of mobile spectrum would raise company costs, calling tariffs and potentially destroy the fast-growing sector.
Leading local mobile phone operators such as Bharti Airtel, Vodafone India and Idea Cellular have warned that operating costs would increase and calling rates would rise by as much as 100 percent for customers.
India enjoys among the world's cheapest tariffs of less than a US cent a minute.
The Telecom Regulatory Authority of India has suggested the government auction the airwaves using a reserve price nearly 10 times the price used in 2008, which has already raised alarms in the industry.
India's government is locked in a battle with Vodafone over tax, with the finance ministry planning to pursue the British giant for some $3.72 billion in back taxes, interest and penalties.
This would be a major blow for the firm which considered the tax matter resolved in January after a Supreme Court ruling in its favour, stemming from its 2007 takeover of Hong Kong-based Hutchison Whampoa's Indian cellular unit.
Vodafone India officials declined to comment on the tax matter.
Vodafone India, the country's second largest mobile phone firm by subscribers, said its local revenues jumped by one-fifth to 321 billion rupees ($5.9 billion) for the year ended March, from levels a year earlier.