The Indian telecommunications industry is one of the fastest growing in the world. The industry has witnessed consistent growth during the last year on the back of rollout of newer circles by operators, successful auction of third -generation 3G and broadband wireless access BWA spectrum, network rollout in semi -rural areas and increased focus on the value added services VAS market. With this the overall tele -density telephones per peop le has touched The wireless subscriber base has increased to The GSM subscriber base stood at
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This marked the penetration of Vodafone into the Indian telecom market and provided the opportunity to Vodafone to tap the huge potential of expansion in India. To this end, Vodafone set up plans to launch services like mobile entertainment, mobile banking and low cost handsets. Vodafone acquired Hutchison Essar, the fourth largest telecom operator in India in Vodafone, the UK based mobile giant on the other hand is the highest revenue earning mobile service operator in the world.
Out of the total bid of The deal was reached after months of negotiations between the two groups and after Vodafone had outbid other prospective companies.
The huge growth potential of telecom in an emerging market like India is of course big reason to be excited about. The average duration of mobile usage per user per month is India is higher than that in Europe. While this is minutes in India, the average mobile usage per user in Europe in a month is only minutes.
Telecom regulations by the Indian government which are conductive to the expansion of cellular services in India. With the penetration into the Indian market Vodafone set its plans to launch certain value added services to tap the Indian market. These include — Mobile entertainment services Mobile banking facilities. Low cost handsets. The acquisition has been held in high esteem by the media as also the business circles both in India and UK and even in other parts of the world.
The deal meets strict acquisition criteria and is expectedly finding support from investors. It will give the company access to a ready India is expected to grow to million users by , currently adding million users a month. Now, it only needs to be seen whether the acquisition can be completed. According to Ruias, promoters of the Essar Group, their compliance is necessary as they hold the crucial right of first refusal. They had earlier stated that they would exercise this right and would consequently match the highest bid at any price. However, for now, analysts are not sure about which way the tide will turn.
Acquisition of Hutch by Vodafone
Such actions are commonly voluntary and involve stock swap or cash payment to the target. An acquisition may be friendly or hostile Slide 4: Horizontal merger - Two companies that are in direct competition and share the same product lines and markets. Vertical merger - A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker. Market-extension merger - Market- extension merger - Two companies that sell the same products in different markets. Cross selling: A manufacturer can acquire and sell complementary products.
Vodafone’s landmark acquisition of Hutch
Choose your FT trial. Vodafone completes Hutch acquisition HTIL also wanted to use the money earned through this deal to fund its businesses in Europe. This will alert our moderators to take action. The case will help the students to: To see your saved stories, click on link hightlighted in bold.