Vodafone secures Azerbaijan partnership

Vodafone has expanded its emerging market operations by tying up with one of the major mobile groups in the oil and gas rich nation of Azerbaijan. The Newbury-based company, which has been linked with a takeover of T-Mobile UK after struggling in its home market, yesterday announced a strategic partnership with Azerfon.

While the deal will see no equity investment from Vodafone, it will receive revenues from the former Soviet Bloc country by launching dual-branded handsets and joint services.

Azerfon is currently constructing the third generation network in Azerbaijan and Vodafone will advise on the introduction of high-speed mobile data networks and mobile broadband.

The group's chief executive Vittorio Colao has signalled his intention to expand in emerging markets although there have been signs that growth has slowed in the downturn. Vodafone announced in May that fourth quarter revenue growth was at 11.1 per cent, down from 15.3 per cent the previous quarter.

Yet, Richard Daley, who heads up Vodafone's Partner Markets division, said yesterday that Azerbaijan was attractive as mobile penetration was about 75 per cent "and growing rapidly". Guido Helbich, the chief executive of Azerfon, said the deal was, "of great importance to both companies".

In the past two years, Vodafone has signed similar deals with companies in Macedonia, Russia and Thailand.