Vodafone's chief executive Arun Sarin sought to reassure shareholders yesterday that he will not overpay for a 67 per cent stake in Hutchinson Essar, India's fourth largest mobile phone operator.
As he revealed that Vodafone had passed the landmark £200m customer threshold, Mr Sarin said the mobile phone giant would table a formal bid in the next few weeks after receiving "some clarification" from Hutchinson on the potential deal in a matter of days.
Vodafone would not go "over the top" on its offer, Mr Sarin said. "We will be disciplined in regards to price," he added. It is understood an informal proposal from Vodafone values the Indian operator at around $17bn.
Shares in Vodafone rose 1 per cent after the company yesterday beat forecasts for new sign-ups in the third quarter with 8.7 million taking up its services. Mobile phone revenues rose 6.1 per cent over the key Christmas period boosted by growth in emerging markets. Growth in Europe, particularly in Germany, has slowed because most consumers already have mobile phones. Vodafone forecast full-year sales to increase 5 to 6.5 per cent.
Vodafone faces stiff competition from India's Reliance Communications and the billionaire Hinduja brothers for the controlling stake in Hutchinson Essar. The Essar group, which owns the remaining 33 per cent has also thrown its hat in the ring although there is speculation this was done to boost the price.
Mr Sarin said it was "highly unlikely" that Vodafone would make a move on Hutchinson's parent company Hutchinson Whampoa, the Hong Kong conglomerate. Russian operator Altimo and Egypt's Orascom have also expressed an interest in the Indian company. India is the world's fastest growing market for mobile phones.Reuse content