The Hindu Business Line : `Roses for Essar, telephony for masses'

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New Delhi Feb. 14 The Vodafone CEO, Mr Arun Sarin, keeps his first date with Indian editors to the minute. Warm, but hardcore professional, he takes a volley of sticky questions with alacrity, not refusing an answer to even one. How will he deal with Essar's unhappiness over not being consulted before signing a memorandum of understanding (MoU) with Bharti on infrastructure sharing? He will send them roses for Valentine's Day, an olive branch and meet them in person, as he is very keen that Essar remains the Indian partner with Vodafone merely stepping into Hutch's shoes.

He goes on to explain that he had only signed a `memorandum of intent' at the time when Vodafone was disengaging the majority of its stake in the telecom company. "It was happening in real time. Essar was also one of the bidders who had made an offer to Hutch. When our offer was accepted and we were disengaging with Bharti, the MoU came up. There was no time. After closing the transaction we will go forward, fully whetted by the board."

If Essar decides to cash in on its 33 per cent stake, how will Vodafone manage to buy them out when the cap on foreign funds is 74 per cent (the British company has already bought 52 per cent)? Going into the numbers, he and Mr Asim Ghosh, Managing Director, Hutch-Essar, said that Essar's 33 per cent stake has 22 per cent held by a foreign entity and only 11 per cent is Indian, which an Indian partner could take on. Hence, the arithmetic was faultless.

Though Mr Sarin's offer to Essar of a "good, solid decision-making partnership" resounded through the meet, Mr Sarin was clear that Vodafone would have the controlling stake and the ticklish question of Essar's `right of first refusal' was a non-issue with respect to his company's bid.

Rural Market

The IIT Kharagpur Indian-origin CEO seems to know his country well, for he has two agendas on hand, both that seem tailor-made for the domestic market — affordable telephony and low cost handsets, which would go down well with the customer, especially as Vodafone plans to aggressively penetrate the rural market and leave its imprint with a 100 million customers in a few years.

Is entering India a homecoming of sorts for him? Mr Sarin was candid. "It's a wonderful feeling and in my Kharagpur days, I would not have dreamt of such a day. However, coming here is what the company wants to do strategically and financially. Homecoming is the icing on the cake."

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