Vodafone's India dilemma closing

HUTCH, THE INDIAN mobile operator run by Hutchison India (HTIL) and Essar, might be within Vodafone's grasp given that Hutchison has asked for final bids to be submitted by this weekend.

Most observers think this will be a four horse race. Vodafone, Essar and Reliance are well-known to be interested. However, the company run by the Hinduja brothers is now rumoured to have formed an alliance with a major overseas operator to. Could it be Orascom, Telecom Italia Mobile, or Qatar Telecom?

Another new name in the frame is Russia's Altimo. Plus there's a new twist to the tale. SingTel has said that it's not entirely convinced that Vodafone's stake in rival Indian mobile operator, Bharti Airtel is actually up for sale.

That's curious because SingTel wants it and Vodafone will almost certainly need to sell its 10 per cent stake if it is successful in buying into Hutch. Which suggests that Vodafone can't be that confident of winning.

The real unknown factor is Essar's ability to have first dibs at Hutchison's stake when it is put up for sale. Significantly the INQ was contacted over this point by a prominent Indian attorney, K.V Dhananjay.

His opinion is that, "In view of the fact that differences exist between Essar and HTIL over the interpretation of the Right of First Refusal (ROFR), it is only reasonable to expect that Essar will pursue its claims aggressively."

Conversely, "It is equally possible that given HTIL's specific denial of any such ROFR by re-stating and qualifying the same ROFR, I do not really foresee any level of ambiguity here that may lead to prolonged litigation".

In effect, he's predicting that one side will back down. Which ties in very nicely with the rumour that Essar might acquire the entire stake, giving it 100 per cent control. And then sell a chunk to an international operator.

Whatever happens, it's been a very messy business. µ

L'INQ
Hutch