Global Economics

India Cheers Vodafone Mega-Deal


The British mobile giant's deal for Hutchison Essar buys them entrance to the world?s fastest-growing telecoms market

Vodafone's latest mega-deal, to acquire Hutchison Essar, has been described by the Indian press as a "do or die" attempt to enter the world's fastest growing telecoms market.

The Times of India, which last month launched a campaign called 'India Poised', likened the deal to another announced over the weekend with the headline 'Double Sundae'.

As the paper pointed out: "For Vodafone and its India-born CEO Arun Sarin, it was possibly the last chance to enter the Indian telecoms market, which is now growing at a faster pace than even China."

Mobile penetration in India is growing rapidly and it is becoming increasingly rare to see anyone without a 'handphone' as they are known, whereas growth of Internet access at home is much slower. Rather than listing a Web address, many billboard ads offer an SMS shortcode which people can text to get more information.

There are expected to be somewhere around 200 million subscribers by the end of the year, with around six million customers being added every month, so the Indian market is certainly a growing one, with increased mobile Internet access expected to push up average revenues per user.

As the Indian Economic Times said on its front page: "The India victory song that started with Corus has reached a crescendo. As Vodafone would say 'Make the most of now'."

Many see the deal as just the latest in a string that shows the power of Indian companies and the strength of the Indian market. For local consumers the Economic Times is predicting charges may go down as Vodafone intensifies competition, and potentially opens the door to 3G services.

But whatever the impact for customers, analysts in the United Kingdom are seeing the deal as a good fit for Vodafone.

Ovum principal analyst John Delaney said the deal was a "bit of a coup" for Vodafone, adding it is a return to its "swashbuckling" days of old and an emphatic execution of its emerging markets strategy.

Provided by ZDNet Asia—Where Technology Means Business

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