New Delhi - British telecom giant Vodafone had offered to
partner India's Essar Group in the country's fourth-largest cellular
services' provider Hutchison Essar and the company was evaluating its
options, a spokesman said Monday.
Vodafone announced late on Sunday that it had acquired Hong
Kong-based Hutchison Telecom's majority stake of 67 per cent in
Hutchison Essar for 18.8 billion dollars.
It also said it had offered to buy out Essar's 33 per cent stake
in Hutchison-Essar at the same share price it had offered Hutchison
Telecom.
But a spokesman for Essar said: 'We have been offered by Vodafone
to be their partner. We are at the moment evaluating all our options
in the best interests of the group.' He said a decision would be
taken in a week or two within a given time frame.
Sources said Essar was seriously considering offloading its stake
given lack of growth prospects with Hutchison Essar after the
Vodafone takeover.
'Vodafone's offer values Hutchison Essar at around 19 billion
dollars. This is a good price,' a statement issued by Essar said.
Under India regulations for foreign direct investment, foreign
companies cannot hold more than 74 per cent sake in Indian telecom
entities.
'Vodafone's arrangement with minority partners will result in a
shareholder structure post-acquisition that meets the requirements of
India's foreign ownership rules,' Vodafone's India-born chief
executive officer Arun Sarin was quoted as saying in London by PTI
news agency.
Vodafone's buyout marks the biggest single investment by a foreign
firm in India which, according to Vodafone, is the world's
fastest-growing mobile telephony market with 6.5 million new
subscribers each month.
Hutchison Essar has a current subscriber base of 24.4 million and
is believed to be adding about a million fresh subscribers per month.
Its market share is a little over 16 per cent.
Vodafone's acquisition of Hutchison Essar would make India its
third-largest market after Germany and the United States, the
Economic Times newspaper reported.
Its India operations were likely to offer the fastest growth
prospects as 80 per cent of prospective users were already covered by
cell services' providers in Germany and 76 per cent in the US.
India's current coverage is only 15 per cent.
Vodafone also announced late Sunday that it would be selling 5.6
per cent equity in Bharti Airtel, India's largest cellular services'
provider, back to the company in keeping with a no competition
agreement.
A spokesman for Bharti said the company would be acquiring the
shares for 1.6 billion dollars on a deferred-payment basis.
Vodafone would continue to hold a 4.4 per cent stake in Bharti
Airtel as financial investor and will not have any representation on
Airtel's board or any management rights, he said.
India's Reliance Communications, the Hinduja Group which teamed
with Qatar Telecom and Russia's Altimo and Essar, were among the
bidders for Hutchison Telecom's stake.
'Vodafone's participation is a further endorsement of the exciting
future growth potential and the progressive policies ... in the
Indian telecom sector,' Reliance Communications chairman Anil Ambani
said in a statement.
Bharti's Sunil Mittal described the Vodafone bid as 'a strong
endorsement of the government policy to promote the Indian telecom
sector.'
© 2007 dpa - Deutsche Presse-Agentur 
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