News: Vodafone, Essar ink agreement; aims for top slot by 2010

(PTI 15/03/2007) New Delhi - Ending weeks of uncertainty, UK telecom giant Vodafone and Indian conglomerate Essar today inked a deal to jointly run the nation's fourth largest mobile firm Hutch-Essar, setting themselves a target of beating market leader Bharti by 2010.

Vodafone CEO Arun Sarin pledged to pump in all the money "it takes" to make the company number one. "We are a healthy company with strong cash flow."

As per the agreement, Essar Vice Chairman Ravi Ruia would be the Chairman, while Sarin would be the Vice Chairman in the reconstituted Board, where Indian partners would have four out of 12 full-time members.

Sarin and Ruia told a joint press conference that they have agreed on partnership terms for Hutchison Essar, in which Vodafone is acquiring controlling stake from Hong Kong's Hutchison Telecom while Essar would retain its 33 per cent.

"The partners have agreed that Hutchison Essar will be renamed Vodafone Essar and in due course... will market its products and services under the Vodafone brand," they said.

To enthuse Asim Ghosh, who would continue to lead the venture, to make Vodafone-Essar the market leader ahead of the 2010 target, Sarin said: "There will be a special bonus for Ghosh."

The contentious issue of Bharti as preferred carrier of NLD and ILD traffic appears to have been sorted out between two partners, with Ruia saying that whoever offered best terms, including his own company, would be given preference.

Sarin, on the other hand, said the MoU with Bharti on infrastructure sharing was not binding and the issue of who would carry the traffic, would be decided by the reconstituted Board.