Vodafone, Essar resolve contentious issue

Vodafone, Essar resolve contentious issue
PTI
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First Published: Wed, Mar 14 2007. 07 09 PM IST
Updated: Wed, Mar 14 2007. 07 09 PM IST
New Delhi: Arun Sarin, CEO of Vodafone which successfully bid for majority stake in domestic mobile firm Hutch-Essar, will visit India 15 March to ink a deal with Indian partner Essar on management and organisational issues.
Nearly a month after the UK firm clinched a deal for acquiring Hong Kong-based Hutchison Telecom International’s controlling stake in HEL, Sarin will announce the terms and conditions of the partnership with Ruias-promoted Essar, which holds 33% stake in the joint venture.
The two firms have also agreed to rename HEL as Vodafone Essar, which would start selling its products and services under the Vodafone brand in due course.
The partnership would be announced at a joint press conference by Sarin and Essar group Vice Chairman Ravi Ruia, sources close to the development said.
However, it was not confirmed whether the deal would be announced in the national capital or Mumbai, where HEL is headquartered.
Under the terms of partnership believed to have been agreed by the two firms, Vodafone would have operational control of Vodafone Essar and Ruias would have rights, such as board representation, in accordance with their 33% equity.
Ravi Ruia is likely to be appointed Chairman of Vodafone Essar board, while Sarin would be named Vice Chairman.
Following the completion of HTIL’s stake sale, which is expected in the next few weeks, Vodafone would get a controlling stake of 51.57% in the venture, while Essar Group would continue to retain its 33.02%.
HTIL’s existing Indian partners Asim Ghosh, Analjit Singh and Infrastructure Development Finance Company Ltd (IDFC) have agreed to remain minority partners with their collective 15.03% stake.
Essar Group to invest Rs1350 cr in telecom retail
Essar Group will pump in Rs1125-1350 crore ($250-300 million) over the next three years in its telecom retail venture and is expecting revenues to the tune of Rs 5,000 crore.
“We will invest 250-300 million dollar over the next three years to set up 2500 ‘The MobileStore outlets´ across the country,” Essar Telecom Retail CEO Rajiv Agarwal said.
The company would also increase its head count by ten fold to 10,000 in the next three years from the current 1000.
With its aggressive expansion plans, the company is aiming to garner about 15% market share in this space with a top line of Rs 4000-5000 crore in the next three years, he added.
The multi-service outlets, The MobileStore, would offer handsets, mobile accessories, new connections, value added services, after sales support and bill payment facilities.
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First Published: Wed, Mar 14 2007. 07 09 PM IST
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