Wednesday, 14 March 2007

Vodafone, Essar Close to Finalising Partnership Agreement

Britain based world’s largest mobile operator Vodafone and the Essar Group of India are almost at the endpoint of finalising their partnership agreement for Indian mobile phone operator Hutchison Essar.

The board of directors of Vodafone had directed the company CEO to make an offer to acquire Hutch, which is said to be India’s fourth biggest mobile operator.

Hutch has operations in 16 Indian states and is regarded as a premium operator and has a good brand recall in India. Hutch is 66 per cent owned by Hong Kong based Hutchison Whampoa and the rest is owned Essar group and Asim Ghosh, the Managing Director of Hutchison India and Analjit Singh of Max Group

India’s telecom market is escalating with leaps and bounds with 5.5 million subscribers every month.

Reliance communications, India’s biggest CDMA operator and second biggest mobile operator was also keenly looking at buying Hutch as it gives the company direct entry into GSM. However, Vodafone beat Reliance to bag Hutch.

Under the terms of the agreement, Vodafone will retain management control of the jointly owned company. Vodafone will appoint Hutchison Essar's chief executive, who will report to Vodafone's management team.