• November 21st, 2011
  • Dafiq Hussein

Indian officials have searched Vodafone’s offices in Delhi and Mumbai as part of an investigation into alleged irregularities in the allocation of the country’s airwaves.

The Central Bureau of Investigation (CBI) has announced that it has registered a case against Vodafone, Bharti Airtel, Vodafone’s main competitor in India, and two former telecoms ministry officials amongst others.

The probe marks another blow to Vodafone’s Indian operations as they are already involved in a Supreme Court battle concerning a $2.5 billion tax bill it claims it should not have to pay. Vodafone, it seems, would more than appreciate some cheap calls to India to be made from Vodafone services around the world in order to try to further boost revenue ever so slightly!

Vodafone, however, claim no wrongdoing as a company spokesman has been quoted saying: “All our documents are in complete compliance with the governing laws and regulations. Vodafone India is completely co-operating with the officials and will provide them all the required details as part of their checks.”

Vodafone is the biggest mobile operator in India, however, they have had a difficult history since launching there in the rapidly growing market in 2007.

Furthermore, Vodafone have frequently clashed with the Ruia family which controls Essar, whom Vodafone had a joint venture with. However Vodafone claim that they were acting in the interests of the Essar group rather than their joint venture. Ties were severed in July when Vodafone bought Essar out of the deal for $5.46 billion.

This, however, did not draw a line under Vodafone’s problems as they are still fighting the Indian government. The telecoms company has said a number of times that it will float the Indian arm of the company on the stock exchange; although Vittorio Colao, the Chief Executive, warned that it needs “regulatory clarity” before it then decides whether to invest anymore in the country.

How will Vodafone manage this latest kerfuffle, and will they be able to avoid more controversy in India?