Vodafone, Essar sign pact; targets top slot by 2010
17 March 2007
Mumbai: UK telecom giant Vodafone, which acquired Hutchison''s stake in Hutch Essar Ltd, has signed a deal with junior partner Essar to jointly run India''s fourth largest mobile firm Hutch-Essar and rename it Vodafone-Essar.
According to the agreement, Essar vice chairman Ravi Ruia would be the chairman, while Sarin would be the vice chairman in the reconstituted board. The Essar group would have four out of 12 full-time directors.
Vodafone CEO Arun Sarin pledged to pump in all the money "it takes" to make the company No. 1 and set a target of beating market leader Bharti by 2010. "We are a healthy company with strong cash flow," he said.
Under the terms of the partnership agreement, Essar would retain its 33-per cent stake in Hutchison Essar in which Vodafone is acquiring controlling stake from Hong Kong''s Hutchison Telecom, Sarin and Ruia told a joint press conference.
Essar will be renamed Vodafone-Essar in due course and the products and services will be marketed under the Vodafone brand, they said.
The contentious issue that remains is of Bharti, which was earlier spoken of as the preferred carrier of NLD and ILD traffic also seems to have been sorted out between the two partners, with Ruia saying that whoever offered the best terms, including his own company, would be given preference.