The bidding for Hutch's Indian assets seems to be heating up. A Reliance win here would be a substantial short-term negative for Qualcomm since it would speed up their transition to GSM. OTOH, a Vodafone win might be a positive. They seem likely to make a push towards 3G when the spectrum opens up.
today.reuters.co.uk
Vodafone mulls options for India's Hutch-reports
Wed Dec 20, 2006 4:18 AM GMT
MUMBAI (Reuters) - Mobile giant Vodafone Group Plc (VOD.L: Quote, Profile , Research) is exploring options for a bid for India's Hutchison Essar, newspapers said on Wednesday, to expand its presence in the world's fastest growing cellular services market.
This could include selling its stake in Bharti Airtel Ltd. (BRTI.BO: Quote, Profile , Research), India's top mobile services firm, the Economic Times said, quoting bankers.
Vodafone has 10 percent in Bharti and has said it is interested in increasing its stake in Bharti and its presence in India.
Hutchison Essar is 67 percent-owned by Hong Kong tycoon Li Ka-shing's Hutchison Telecommunications International (2332.HK: Quote, Profile , Research) and India's Essar group, which holds the remainder, has first right of refusal if Hutchison decides to exit.
Vodafone's interest in Hutch, India's fourth-largest mobile services firm, would be in line with its strategy of focussing on core western European markets and expanding in emerging markets.
But its shareholding agreement with the Bharti group bars Vodafone from competing with Bharti for one year after the sale of its shares in the Indian company, the Economic Times said.
"We have no comment to make concerning speculation about our 10 percent holding in Bharti Airtel," the newspaper quoted a Vodafone spokesman as saying.
The paper also quoted Bharti's Chairman Sunil Mittal as saying Bharti was "not in the picture," and that it had not made a bid for Hutch.
Indian laws mandate that a telecom firm's ownership in another telecom firm be capped at 10 percent, or it would have to buy the entire 100 percent.
Local newspapers have said India's Anil Ambani group, which controls Reliance Communications Ltd. (RLCM.BO: Quote, Profile , Research), the country's second-biggest mobile services firm, alongwith a clutch of private equity funds, were ahead in the race for Hutch.
A successful bid would give Reliance Communications the lead in the lucrative Mumbai market and catapult it to the top in the fast-growing Indian market.
Local papers have also named Malaysia's Maxis (MXSC.KL: Quote, Profile , Research) -- which last year bought 74 percent in India's Aircel, and Egypt's Orascom Telecom (ORTE.CA: Quote, Profile , Research) (ORTEq.L: Quote, Profile , Research) as potential suitors.
Macquarie Securities estimated Hutchison Essar's enterprise value at $13.7 billion (7 billion pounds) with an equity value of $12.18 billion.
But Ambani had revised the enterprise value of Hutchison Essar to $15 billion-$17 billion because Hutchison was looking "for a larger premium," the Business Standard said, quoting banking sources. |
