Vodafone India's ability to continue operating could hinge on whether it can re-acquire needed spectrum in an upcoming auction, according to the company's managing director.
Martin Pieters told India's Economic Times that the sustainability of its operations would be threatened if it cannot buy back spectrum in non-metro areas once its licenses expire in 2016.
While Vodafone's spectrum in metro areas was re-auctioned this year, in that situation the company had the ability to fall back on 1800-MHz spectrum should it not have reacquired the spectrum.
But in the non-metro telecom circles, Pieters said the situation is “very dismal” as no such fall-back is available.
The company has shelved plans for an IPO as a result of the uncertainty, as well as Vodafone's ongoing tax battle with the Indian government over the acquisition of its Indian operations, Pieters said.
He added that Vodafone India would like “peace with the government” before conducting an IPO.
Vodafone filed for international arbitration over the tax battle earlier this year, and expects the case to be heard by the end of the year.
With interest and penalties, the total tax bill Indian officials are seeking now exceeds 200 billion rupees ($3.31 billion).