Part of the deal sees Essar's Ravi Ruia becoming chairman of company while Vodafone's Arun Sarin, will act as vice chairman. Sarin has said that he wants Vodafone Essar to become the leading player in India by 2010.

The way in which the agreement has been reached could prove controversial. Hutchison Telecommunications International Ltd (HTIL) - whose stake Vodafone is acquiring - has apparently agreed a payment to Essar of around $415 million.

In return Essar will drop any attempts it might have made to claim first rights to buy the HTIL stake of 67 per cent instead of Vodafone. The agreement shows that Essar fully intends to co-operate with Vodafone in the new company.

There may be a snag, however. Indian law prevents a foreign company from owning more than 74 per cent of a native telecommunications company. Vodafone has off-loaded part of its share onto two Indian nationals - Analjit Singh and Hutchison Essar's managing director, Asim Ghosh.

The catch is that part of Essar's stake is held overseas. So in total, more than 74 per cent could be regarded as being in 'foreign' hands.

Sarin does appear to have achieved his objective of breaking into what is the world's fastest expanding cellular market. The question is where does Vodafone look next?

One obvious answer would be the former Soviet Republics. But Telenor of Norway's experience in a previous part of Russia - the Ukraine - doesn't bode well.

Presently Telenor is locked in a protracted legal battle with Russia's Altimo over Ukraine's largest mobile operator, Kyivstar. A serious slanging match between the two is currently underway.

So where could Vodafone exploit its forthcoming expertise in providing cellular services to remote rural communities whose residents have low incomes but poor existing telecoms infrastructure?

Sounds like America to the INQ. And not just South America but North America. Pity Vodafone is locked into cdmaOne operator, Verizon, then.

What's the point of being able to source ultra low-cost GSM handsets when you ain't tied up with a GSM operator in the USA? µ