Vodafone to enter India in six months

UK-BASED mobile services major Vodafone plans to step up its presence in India in about six months, chief executive Arun Sarin told a group of journalists from India. Vodafone last month bought out Hutchison Telecom’s 52% stake in Hutchison Essar (HEL) in a deal that pegged the enterprise value of the firm around $19 billion. Vodafone has not set any deadline for renaming the Hutch brand in India to Vodafone. “The Hutch brand is a very good brand in India. When people prefer Hutch over other rival brands, there is a strong reason. We want to understand what is that people like about Hutch and transport that into the Vodafone brand,” Mr Sarin said. “We are coming into India with network, low-cost handsets, services - information services, entertainment services. We will mix that all up and in six months’ time, you will get a feel that Vodafone has come to India,” Mr Sarin added. Vodafone is yet to get the final nod from the Foreign Investment Promotion Board (FIPB). But Mr Sarin is unruffled, for now. “It is not disappointing,” Mr Sarin said of the delay in getting the approval, saying that the deal was barely a month old. “Maybe if this question was asked six months from now, I would say that it is disappointing. The FIPB has to be given time, and I am fine with it. At the end of the day, I want the FIPB, the Ministry of Finance, the telecommunications ministry, the industry ministry and the prime minister to say that you are welcome here. The last thing we want to do is show up one fine day and then people ask, ‘hey hang on, which door did you come from, was it the front door, back door or side door?’ ” he said. A key element of Vodafone’s India strategy would be to introduce low cost mobile phones so as to make mobile services more affordable to the average user. “You will see some interesting low-cost handsets. Our basic thesis is that we want to make mobile telephony more affordable to more Indian consumers,” Mr Sarin said. Low-cost handsets, apart from falling tariffs, have been one of the major factors driving the telecommunications boom in India over the past few years. Mobile phones are now available for as low as Rs 1,500 and industry officials have voiced doubts if the prices could be lowered further. “At this stage, all I can say is that (mobile handset) prices have room to go lower and we will take it there,” Mr Sarin said. “We are here because we think we can do something for the Indian population.” He said he wasn’t worried about falling average realisation per user (ARPU) as the economy was growing, and hence, a growing user base would make up for any decline in margins On the issue of partnering with the Ruias, Mr Sarin said Vodafone was looking to start the relationship on a clean slate. “People have suggested that the Ruias are difficult folks to deal with. All I can say is that a company or group’s reputation is built through action. As far as we are concerned, we are new players, we have a fresh history with them, I am not going to judge them on what has happened in the past. Their relationship with Hutchison is their relationship with Hutchison. I cannot say what Hutchison did to them or what they did to Hutchison. All I can say is that our relationship is starting afresh,” Mr Sarin said.

DIALLING IN
• Vodafone bought out Hutchison Telecom’s 52% stake in HEL in a deal that pegged the enterprise value of the firm at $19 bn
• The co hasn’t set a deadline for renaming the Hutch brand in India to Vodafone and is yet to get the final nod from the FIPB
• A key element of Vodafone’s India strategy is the introduction of low-cost mobile phones to make mobile service affordable to Indian users

Courtesy: EconomicTimes
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