Vodafone swoops on Hutch Essar

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Vodafone swoops on Hutch Essar

Controlling stake of Indian GSM operator costs US$11.1bn.

Vodafone has paid US$11.1bn for a controlling share in Indian telecoms firm Hutch Essar. 

The long-running takeover bid means that rival bidder Reliance Communications has lost in its attempt to become a major GSM operator in India. 

Reliance currently operates a mostly CDMA service and had hoped to add India's fourth largest GSM operator to its portfolio.

"This is a bit of a coup," said John Delaney, principal analyst at Ovum. "We got used to Vodafone cutting a dash in the days of Chris Gent, but swashbuckling has never seemed like Arun Sarin's style." 

Delaney said that the deal, which values Hutch Essar at just under $19bn, is expensive but necessary to control an operator in one of the world's biggest and fastest growing markets.

"We have criticised Vodafone in the past for not having an emerging markets strategy," added Delaney.

"Last May, it finally articulated one. And now it has executed on that strategy in the most emphatic way one could imagine."


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