Vodafone plans to make it Big in India

Vodafone, the world's largest mobile player in terms of revenue, which has just bagged the Hutch operations in India, said that it would bring in all incremental investment while ruling out an Initial Public Offer for raising funds from the market.

Indian-born chief executive of Vodafone, Arun Sarin said that the company would invest two billion dollars in India in the next couple of years. The company has accumulated nearly 25 billion dollars in about a year by selling stakes in various mobile ventures across the world. Sarin’s statement "We have enough funds" said it all.

While announcing its bid to acquire Hutch-Essar for 11.08 billion dollars, Vodafone had also announced that it would sell 5.6 per cent stake in Bharti Airtel for 1.6 billion dollars to meet statutory requirements.

The announcement by Vodafone that it intended to share infrastructure with Bharti Telecom had antagonized the Essar group. Ruias, who own Essar, hold a 33-percent stake in Hutch-Essar, were seemingly peeved at not being consulted by Vodafone before entering into the pact. They even contemplated legal action.

Vodafone categorically said that should the Essars choose not to remain invested, they will be offered the same price for their 33-percent share that was offered to Hutchison.

Vodafone declared that it would compete aggressively in India and unleash a new strategy that could eventually see a change in the Hutch-Essar brand. Speaking about Vodafone's larger plans for India, Sarin said that his group was especially keen to tap the potential in the rural areas.

Hutch-Essar had a subscriber base of 23.3 million and a 16.4 percent market share in the country. It operates in as many as 22 out of 23 areas where licenses have been issued.

The London-based alumnus of the Indian Institute Technology (IIT) at Kharagpur minced no words in stating his future plans. He said, “We have the experience to grow fast. We will make the service more affordable. We will bring in low-cost handsets and bring a whole new range of products and services to India.

A very confident Sarin said, “We are in India for a very long time. We will be number one here.”