Indian telecom sector poised for more action

Mumbai, June 17: The Indian cellular sector is poised for more action ahead, as, close on the heels of Reliance Communications and Tata Indicom announcing a cut in tariffs, Hutch has followed suit and its new suitor Vodafone Plc has announced it would invest a whopping USD 2 billion in consolidating and expanding its business in India.

Mobile services operator Hutch has announced a 50 per cent cut in the minimum monthly recharge required for a prepaid customer. Its prepaid customers can now talk for a month at a cost of Rs 99 instead of the earlier minimum recharge of Rs 199 for a month's validity, the company said and claimed that it was the first mobile service provider to offer a month's validity at this price.

Hutch marketing director Harit Nagpal, in a statement said, ''Hutch was the first mobile operator to introduce the concept of micro recharges for as low as Rs 10 way back in 2005. This is another big step in making a Hutch connection very affordable so that many more people can go mobile.'' Meanwhile, Vodafone chief executive officer Arun Sarin announced that they would invest USD 2 billion in consolidating and expanding its business in India. The investment will be made in a phased manner, he clarified and revealed that the British wireless service provider also plans to bring in low-cost handsets to India.

The Indian-born Mr Sarin had earlier attended the first board meeting of Hutchison Essar on Friday, following the acquisition of India's third-largest mobile operator earlier this year. He said he hoped to complete the integration of Hutch Essar with Vodafone by September and disclosed that Hutch Essar will soon be re-christened Vodafone Essar. Its Board will have six members from Vodafone, four from Essar and two independent directors, he clarified.

Essar's vice chairman Ravi Ruia would be chairman of Vodafone Essar while Sarin would be the vice-chairman. Asim Ghosh, the current managing director of Hutch Essar will be the CEO, an official statement added.

Vodafone holds a majority 67 per cent stake in Hutch Essar while Essar owns the balance. Vodafone's takeover of 52 per cent stake in Hutch Essar from Hong Kong-based Hutchison Telecom International Limited (HTIL) was earlier challenged by the Indian Government citing violation of foreign direct investment norms, industry observers noted and added that however, the deal was eventually cleared by the Foreign Investment Promotion Board (FIPB) and by Finance Minister P Chidambaram on May 4, paving the way for Vodafone's re-entry into India.

Very soon, Hutch Essar House will be the Vodafone Essar House, Mr Sarin said and added that Vodafone aims to add 1.5 million new subscribers every month.

Meanwhile, Hutch Essar's total user base has crossed the 30 million mark, becoming only the second mobile service provider to do so. At present, the company operates in 16 of the total 23 mobile circles in India, market analysts tracking the telecom sector pointed out.

UNI