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Vodafone India

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Vodafone India


Private (subsidiary of Vodafone International Holdings BV(VIH) )



Predecessor(s) Hutchison Essar




Mumbai, Maharashtra, India


Mobile telephony Wireless broadbandservices


Vodafone Group


Vodafone India, formerly Vodafone Essar and Hutchison Essar, is the third largest mobile network operator in India after Airtel and Reliance Communications. It is based in Mumbai, Maharashtra and which operates nationally.

It has approximately 146.84 million customers as of November 2011.

The UK firm paid $5.1 billion. In Delhi. Essar Group was the major partner. Vodafone agreed to acquire the controlling interest of 67% held byLi Ka Shing Holdings in Hutch-Essar for US$11.46 billion to its Indian counterpart to take Essar out of its 33% stake in the Indian subsidiary. in compliance with Indian law. established a company that in 1994 was awarded a licence to provide mobile telecommunications services in Bombay (nowMumbai) and launched commercial services as Hutchison Max in November 1995. 2007.1 Inactive Subscribers 4 Competitors 5 Awards and recognition 6 See also 7 References 8 External links [edit]History [edit]Hutchison Essar (1992-2007) In 1992.75G services based on 900 MHz and 1800 MHz digital GSM technology. It offers both prepaid and postpaid GSMcellular phone coverage throughout India with good presence in the metros. Hinduja Group. The whole company was valued at USD 18.[3] The transaction closed on 8 May. Vodafone India provides 2.3 Vodafone-Hutchison Tax Case 2 3G 3 Subscriber Base o 3. [4] Contents [hide] 1 History o 1. But later Hutch took the majority stake.1 Timeline o o 1.On July 2011. which is the owner of the remaining 33%. It will leave Vodafone owning 74% of the Indian business. . pipping Reliance Communications. Vodafone Group agreed terms for the buy-out of its partner Essar from its Indian mobile phone business.[2] On 11 February.8 billion.1. Vodafone India launched 3G services in the country in the January-March quarter of 2011 and plans to spend up to $500 million within two years on its 3G networks.1 Hutchison Essar (1992-2007)  1. Hutchison Whampoa and its Indian business partner ± Max Group. and Essar Group. 2007. while the other 26% will be owned by Indian investors. Rajasthan and Haryana. Uttar Pradesh (East).2 Vodafone acquires Essar's Stake 1.

Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL Mobile that number increased to 16." The simple yet powerful advertisement campaigns won it many admirers. Andhra Pradesh and Chennai .1 billion. [edit]Timeline 1992: Hutchison Whampoa and Max Group establish Hutchison Max 2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets through Essar acquisition 2001: Won auction for licences to operate GSM services in Karnataka. Hutch was often praised for its award winning advertisements which all follow a clean. A recurrent theme is that its message "Hi" stands out visibly though it uses only white letters on red background. Vodafone's creative agency is O&M while Harit Nagpal was the Marketing Director during the various phases of it's brand evolution. Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs. expenses and interests) of approximately $11. minimalist look. Initially. The brand subsequently introduced ZooZoos which gained even higher popularity than was created by the Pug. "Wherever you go. it announced the acquisition of a company (Essar Spacetel ² A subsidiary of Essar Group) that held licence applications for the seven remaining licence areas. In these densely populated urban areas it was able to establish a robust network.By the time of Hutchison Telecom's Initial Public Offering in 2004. Ads featuring the pug were continued by Vodafone even after rebranding. with the tagline. it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide. In February 2007. By adopting this focused growth plan. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User (ARPU) than its competitors. well known brand and large distribution network ± all vital to long-term success in India. In 2006. the company grew its business in the largest wireless markets in India ² in cities like Mumbai. Another successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places. our network follows. Delhi and Kolkata.

This left BPL with operations only in Mumbai. North East and Bihar.A 'You and I' print advertisement of Hutch featuringCheeka (dog) 2003: Acquired AirCel Digilink (ADIL ² ESSAR Subsidiary) which operated in Rajastan. [edit]Vodafone acquires Essar's Stake On March 31. [5] In 2007. 2011: Vodafone Group buys out its partner Essar from its Indian mobile phone business. The company is renamed Vodafone Essar. Assam.7 billion. 2011. Vodafone Group Plc announced that it would buy an additional 33% stake in its Indian joint venture for $5 billion after partner Essar Groupexercised an option to sell the holding in the mobilephone operator. The deal will raise Vodafone¶s stake to 75%. Vodafone granted options to Essar that would enable the conglomerate to sell its entire stake for $5bn. Essar will exit the company after it implemented aput option over 22% of the venture. It paid $5. where it still operates under the brand 'Loop Mobile'. It left Vodafone owning 74% of the Indian business. Uttar Pradesh East and Haryana telecom circles and rebranded it 'Hutch'. 'Hutch' is rebranded to 'Vodafone'. [6] It had approached the market regulator SEBI and also filed a petition in the Madras High Court. 2008: Vodafone acquires the licences in remaining 7 circles and has starts its pending operations in Madhya Pradesh circle. or to dispose of part of the 33 per cent shareholding at an independently appraised fair market value. Vodafone objected to Essar¶s plans to place part of its 33% stake in India Securities. 2005: Acquired BPL Mobile operations in 3 circles. a small public company. Vodafone feared the move would give an inflated market value to Vodafone Essar. In January 2011. Vodafone exercised its call option to buy an 11% stake. .46 billion to take Essar out of its 33% stake in the Indian subsidiary. Uttar Pradesh (West) and West Bengal. 2004: Launched in three additional telecom circles of India namely Punjab. 2007: Vodafone acquires a 67% stake in Hutchison Essar for $10. as well as in Orissa.

On 16 March. Tamil Nadu. which acquired Hutchison Telecommunications International Ltd¶s (HTIL) Hutchison Telecommunications International Limited stake in Hutchison Essar Ltd (HEL)²the joint venture that held and operated telecom licences in India. saying that the Indian Income tax department had "no jurisdiction" to levy tax on overseas transaction between companies incorporated outside India. Kolkata. entered India in 2007 through a subsidiary based in the Netherlands. Vodafone also said that final settlement is anticipated to be completed by November 2011. or part thereof was liable to be taxed in India. Vodafone has assured it will comply with local rules. Andhra Pradesh and Uttar Pradesh (West) through an agreement with Idea and in Karnataka through an agreement with Airtel. In January 2012. Uttar Pradesh (East) and West Bengal.[11] Vodafone also operates 3G services in Kerala.The final shareholding pattern post this deal was not provided by the company as it was not clear whether Vodafone's stake would exceed the 74 per cent FDI limit. Maharashtra & Goa. Mumbai.[7] [edit]Vodafone-Hutchison Tax Case Vodafone was embroiled in a $2.[10] [edit]3G On 19 May 2010.86 million (the second highest amount in the auctions) for spectrum in 10 circles. and therefore the transaction. along with several related agreements. This Cayman Islands transaction. then it should be Hutchison to bear the tax liability. and even if tax were somehow payable. The completion of the deal would be subject to meeting certain conditions which include Reserve Bank of India's permission as well as valuation of the deal. a deal that cost the world¶s largest telco $11. gave Vodafone control over 67% of HEL and extinguished Hong Kong-based Hutchison¶s rights of control in India. or they¶ll have to consider an initial public offering. The circles it will provide 3G in areDelhi. but the Uttar Pradesh (East) launch counts as its first fully commercial launch. Vodafone launched 3G services in Uttar Pradesh (East) in the city of Lucknow. 2011. This gives Vodafone a 3G presence in 13 out of 22 circles in India. Gujarat. Indian laws don't allow foreign companies to own more than 74% in a local mobile-phone operator. It was being alleged by the Indian Tax authorities that the transaction involved purchase of assets of an Indian Company. the Indian Supreme Court passed the judgement in favor of Vodafone.[12] Vodafone had already launched limited 3G services in Chennai and Delhi earlier. Vodafone paid 11617.. Vodafone will have to sell that 1% to some Indian entity. Haryana. Vodafone had maintained from the outset that it is not liable to pay tax in India. Kanpur.2 billion at the time.[9] The crux of the dispute had been whether or not the Indian Income Tax Department has jurisdiction over the transaction. This makes Vodafone the fifth . the 3G spectrum auction in India ended.5 billion tax dispute with the Indian Income Tax Department over its purchase of Hutshison Essar Telecom services in April 2007. [8] Vodafone Group Plc.

277 Uttar Pradesh(West) 92. of Subscribers Gujarat 1.824 West Bengal 1. Koyilandy.573 Uttar Pradesh(East) 1.49.024 Delhi 77. 2011 Telecom Cicle No.40.Reliance Communications. operator (seventh overall) to launch its 3G services in the country following Tata Docomo. Cherthala.217 Maharashtra 1.34.557 Rajasthan 87.34. On 23rd June.62.47. Alappuzha.[13] Subscriber Base Statistics as on January. 2011 Vodafone launched 3G service in Kerala by joining with Idea in an Intra Circle Roaming agreement.376 Kanpur 71. Calicut. Initially Vodafone 3G services will be available in the following cities in Kerala ± Ernakulam. Airtel and Aircel.88. Malappuram and Manjeri.815 Tamil Nadu 93.576 .369 Andhra Pradesh 73.19. [edit]Subscriber Base Following is the Vodafone India subscriber base statistics as on June 2011. Aluva.10.30.

580 Chennai Punjab Haryana 41.109 North East 8.148 Kolkata 43.61.13. 2011 Telecom Cicle No.253 Himachal Pradesh 3.430 Mumbai 58.73.113 .159 Assam Orissa 23.Subscriber Base Statistics as on January.943 Madhya Pradesh 31.039 Kerala 55.70.177 Bihar 52. of Subscribers KARNATAKA 65.826 Jammu & Kashmir 5.57.

Cheers Mobile. S Tel. while existing customers would be informed via SMS and outbound calls. Source : http://coai. BSNL. They are Aircel. 23. This is .php [edit]Inactive Subscribers On 19 December 2011. Ping Mobile. Airtel.15.674 Indian mobile phone subscribers.840. Tata Indicom. ³This guideline has been implemented because the Department of Telecommunications' stringent guideline for allocation of new number series based on subscribers in VLR (visitor location register) has created acute shortage of numbers. Vodafone acquired Hutch for a whopping 10 billion USD! Most of us would be wondering. Reliance Communications. The mobile operator further said that new customers would be intimated of the deactivation process in their starter kits. [edit]Awards and recognition The Brand Trust Report. as the name suggests occurs when two companies go ahead and merge into a bigger company. SMS and data usage ² for any continuous period of 60 days. DoT has asked mobile operators to screen their users and allocate unused numbers to new subscribers.87. around 25% of the total subscriber base is lying unused. Tata DoCoMo.[15] 2011 published by Trust Research Advisory has ranked Vodafone[16] as the 16th most trusted brand in India.Total number of Vodafone India Subscribers : 14. i. Vodafone said it would discontinue mobile services of prepaid customers whose connections are lying unused ² with no voice calls (incoming or outgoing). [edit]Competitors Vodafone competes with 14 other mobile operators throughout India. MTS.e. [14] As per industry estimates.63% of the total 59. Videocon and Virgin Mobile. the network follows! Hutch¶s famous punch line which was adapted appropriately in its much loved advertisement turned out to be quite a pun as the µMerger&Acquisitionµ bug followed and finally caught up with Hutch! Following an entire battle of give and take.19. Uninor. wherever possible.´ Vodafone said in a statement. that why at all a company should acquire a rival? What are the gains and risks involved in the entire transaction and how are mergers different from acquisitions? A Merger. Wherever you go. mostly under a different name.79. Idea. Loop for any telecom company. MTNL.

If a company buys the shares of the other company without prior knowledge. which was a friendly acquisition. It could also show how powerful you are as compared to your rival. An acquisition. Coming back to the Hutch and Vodafone instance. A merger might resemble an acquisition. growth and market reach of a brand. several factors need to be kept in mind. Well. an acquisition can be friendly. Considering that such actions are taken to increase the popularity. obviously a company acquires the other or two companies merge together to accelerate their growth without having to create a separate business entity. which takes place when two companies agree to share the risks involved in the deal. However. Accurate business valuation is one of the most important aspects of M&A as valuations like these will have a major impact on the price that a . When a company decides to take over the other. Another important factor that comes into play is the geographical diversification: This is designed to smooth the earnings results of a company. as opposed to a merger. giving conservative investors more confidence in investing in the company. but it is named so in most cases due to political and marketing reasons to avoid media frenzy. rules are in place to limit the ability of profitable companies to ³shop´ for loss making companies. one has to be aware of the consequences of the deal. they actually reduce the costs incurred to the same revenue stream thus increasing their overall profits. In the United States and many other countries. it is indeed quite similar. economies of scale which refer to the fact that two companies merge together. Mergers and acquisitions are an important part of brand building. some of them being. it is a hostile takeover. this does not always deliver value to shareholders. limiting the tax motive of an acquiring company. How much technological know-how and expertise exists with the company to actually go ahead and ensure such a process. which over the long term smoothens the stock price of a company. There are thus several motives behind merger and acquisitions. it is seen that a lot of expenditure is involved in such deals. Companies also increase their brand value and market share by taking over a rival. A profitable company can buy a loss maker to use the target¶s loss as their advantage by reducing their tax liability. However if both companies cooperate and reach at a final stand. can be friendly or hostile.often a result of stock swap.

in this method of give and take. bankers. suppliers. Thus. Thus need for secrecy has thwarted the emergence of a public forum or marketplace to serve as a clearinghouse for this large volume of business. customers and others might have if the effort or interest to seek a transaction were to become known. Their concern for secrecy usually arises from the possible negative reactions a company¶s employees. Market participants often wish to maintain a level of secrecy about their efforts to buy or sell such companies. it always remains to be seen how well planned the move was but in the end it is the market that the decider. Surbhi Bhatia . No marketplace currently exists for the mergers and acquisitions of privately owned small to mid-sized will be sold for.