Mumbai: Vodafone Group Plc has vowed not to pay “over the top” in the multibillion-pound battle for India’s Hutchison Essar as the British mobile phone giant said it had crossed the 200-million customer mark.
Chief executive Arun Sarin said final bids in the auction to win control of India’s fourth biggest mobile operator were still “weeks away” and that the probability of Vodafone’s success remained “very hard to call”.
Meanwhile, Hutchison Essar attracted one more suitor, with Russian telecom group Altimo expressing its interest. The group is talking to the Essar and Hinduja groups about a possible role in the bidding for Hutchison Essar. “It’s of natural interest to us and if there is a transaction where we can have a role and we are welcome, we’ll do it,” Altimo’s chief financial officer, Teijo Pankko,said.
Vodafone, Europe’s most valuable telecom company, is one of at least four bidders looking at a 67% stake put up for sale by Hutchison Essar’s parent, Hutchison International Ltd of Hong Kong.
Hutchison Essar’s rising valuation had led to some concerns that the firm that eventually buys it could end up overpaying. Also in the race are the Essar and Hinduja Groups. Essar owns the remaining 33% stake in the company.
“(This asset is) very strategically aligned with what we have been saying to shareholders. Equally, we are going to be financially disciplined. We will participate fully, but we are not going to go over the top,” Sarin told reporters.
The bidding for Hutchison Essar, ultimately controlled by Hong Kong-based ports-to-telecom conglomerate Hutchison Whampoa, kicked off in late December 2006 with valuations of around$13-15 billion (Rs5,720-Rs6,600 crore), which have shot up to as much as $20 billion (Rs8,800 crore).
Vodafone, which is battling India’s Reliance Communication and the Essar and Hinduja groups in the auction, is increasingly dependent on growth in emerging markets to compensate for slowing growth in Western Europe.
Vodafone, which has a 10% stake in India’s biggest mobile operator, Bharti Airtel, haslong been keen to increase its exposure to India, the world’s fastest growing mobile market. The Indian market is seeing around 6 million new subscribers added each month with plenty of headroom to grow more.
Vodafone crossed the 200-million mark when it added 8.7 million customers in the three months quarter ended December 31, 2006.
“It took us 15 years to get our first 100 million customers,” Sarin told reporterssaid. “It took us five years to get the next 100 million. There is good momentum in the business.”