The deal is a critical move by Vodafone’s Global CEO Arun Sarin, who is under
pressure amid slowing growth in Vodafone’s core European markets, to expand the business – while not overpaying for acquisitions. India is the world’s fastest-growing major mobile phone market and has even surpassed China in terms of new mobile subscribers’ subscription and Hutchison Essar has a market share of 16%. Bharti will buy 5.6% direct stake from Vodafone for $1.6 billion and Vodafone will not have any representation on Bharti’s board.
However, Vodafone will continue to hold 4.4% indirect stake in Bharti Airtel. Also, the customers of Vodafone will use Airtel’s network when in India and the company will also use Bharti’s NLD and ILD business. The European telecom major will give 50% inbound roaming traffic to Bharti for the coming three years.
pressure amid slowing growth in Vodafone’s core European markets, to expand the business – while not overpaying for acquisitions. India is the world’s fastest-growing major mobile phone market and has even surpassed China in terms of new mobile subscribers’ subscription and Hutchison Essar has a market share of 16%. Bharti will buy 5.6% direct stake from Vodafone for $1.6 billion and Vodafone will not have any representation on Bharti’s board.However, Vodafone will continue to hold 4.4% indirect stake in Bharti Airtel. Also, the customers of Vodafone will use Airtel’s network when in India and the company will also use Bharti’s NLD and ILD business. The European telecom major will give 50% inbound roaming traffic to Bharti for the coming three years.
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Source : IIPM Editorial, 2006
An IIPM and Management Guru Professor Arindam Chaudhuri's Initiative
