Vodafone in India
UK-based Vodafone, the world's #1 cell phone company, once an aggressive buyer, has been tentative in recent years, getting out of markets more often than getting in (for example, in Japan and Sweden). But a new deal was announced that would give Vodafone controlling interest in Hutchison Essar, the Indian cell phone company owned primarily by Hutchison Telecommunications, owned by Hong Kong-based conglomerate, Hutchison Whampoa. (33% is owned by Indian company Essar.) The deal is for $11.1 billion. Vodafone beat out several in-country buyers, including Essar itself.
Hutchison Telecommunications still maintains a strong position in cell phones in Hong Kong, Macau, Israel, Thailand, Sri Lanka, Ghana, Indonesia and Vietnam. Its sister companies, also owned primarily by Hutchison Whampoa, are found in Ireland, the UK, Australia, and Denmark. This is truly a deal between telecom giants.
Hutchison Essar is the #4 cell phone company in the Indian market, but it is a relatively strong #4, with 16% market share. And the Indian cell phone industry is growing fast with 5 million new subscribers each month. As of yet, only 15% in the country use cell phone service.
Vodafone has 200 subscribers worldwide. Vodafone also announced it has signed a deal to share infrastructure in India with rival Bharti Airtel (the #1 Indian cell phone company), a deal that should help both companies grow, since national coverage is still quite spotty.
The move is a big bet by Vodafone that it can work its magic in India. It's also a big vote of confidence in continued growth in that market. Along with other deals (like Tata Steel's purchase of Corus), it's a signal of the growing importance of India in the world economy. But it's also an indication that the cell phone business is reaching maturity in Europe and the US, so that growth-oriented companies have to look elsewhere.
6:08:21 PM 
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