Vodafone Group Plc, which has resisted setting aside
money for a $2.2 billion tax bill in India, may make a provision to cover the legal risks.
The world's second-largest mobile phone operator is consulting on the need for a provision after an amendment by the government to a tax law made the
company potentially liable for the payment.
"The situation has changed and we are looking at it," Chief Financial Officer Andy Halford said from Vodafone's headquarters in Newbury, England.
A decision will be made by November, he added.
Vodafone in January defeated the initial government demand for taxes stemming from its 2007 acquisition of Hutchison Whampoa's Indian operations in the country's top court.
In response, the government
amended the law to retrospectively tax cross-border transactions dating back to April 1, 1962.
The company's test over whether to take a provision "is now being applied differently against a recently introduced, albeit retrospective, legislation".
Vodafone may also have to pay as much as $4 billion in spectrum costs at the upcoming 2G auction, Hogley said.
The British operator, which also faces increased costs for radio frequencies in India, is relying on fast-growing markets like India, as consumers
cut spending in debt-stricken Europe, where the operator derives as much as 70 per cent of its revenue.
The operator is scheduled to report first-half earnings in November. For the 12 months through March 2013, Vodafone is predicted to report net income of 7.9 billion pounds ($12.8 billion) by analysts.
Vodafone and Sunil Mittal's Bharti Airtel, among other operators, contributed to building the world's second-biggest mobile phone market after India opened up the industry in the 1990s.
Subscribers have grown 158 times to more than 900 million since 2001, and competition means users enjoy some of the world's cheapest calls.
With inputs from agencies
Special 
