The Hindu Business Line : Vodafone recasts Hutch Essar board

Birth pangs
New board has 8 nominees from Vodafone, 4 from Essar
Keen on setting up platform for infrastructure sharing
Subscriber base expansion at 1.5 million per month
Integration process to cover every sphere of operations

Mumbai June 15 The Vodafone-Hutchison Essar integration process got under way on Friday, with the reconstituted board holding its first formal meeting and committing to invest $2 billion in this fiscal for infrastructure and network expansion.

UK's Vodafone picked up Hong Kong-based Hutchison Telecommunications International's stake of 52 per cent in Hutchison Essar for an enterprise value of $18.8 billion in February this year.

The reconstituted board of the new entity will have Mr Ravi Ruia of the Essar Group as Chairman, Mr Arun Sarin, CEO of Vodafone, as Vice-Chairman and Mr Asim Ghosh as Managing Director.

The new board will have eight nominees from Vodafone and four from the Essar Group.

The other six nominees from the Vodafone side are Mr Paul Donovan, Mr Gavin Darby, Mr Vittorio Colao and Mr Robert Barr, and Mr Analjit Singh and Mr C.R. Dua as independent directors.

Along with Mr Ravi Ruia, Mr Prashant Ruia, Mr Anshuman Ruia and Mr Vikash Saraf will represent the Essar side in the new entity.

Emerging from the meeting at the Hutch House in Mumbai, Mr Sarin said: "The new address of this building will shortly be slightly different... it will be Vodafone Essar House."

Mr Ravi Ruia described the first board meeting as "excellent," saying that the Essar Group formally welcomed Vodafone as its new partner.

He added that the board has decided to change the name of the company from Hutchison Essar to Vodafone Essar. "The process started today and will be completed in the next few days."

Mr Sarin said that the integration process would cover every sphere of the company's operations, including network, sales and marketing, and the HR side.

He expects the first part of the integration process to be completed by the end of September. "But it does not end here, it is a continuous process."

New platform

On infrastructure sharing with other cellular service providers, Mr Sarin unequivocally said that infrastructure sharing in this sector was important to reach out to distant customers across India.

"We are interested in setting up a platform for whoever wants to join us to provide excellent network experience across the country."

Vodafone Essar is in talks with a "few parties" to join the platform it intends to create so as to provide a cost-effective way to expand the mobile telecom network across India.

On investment plans, Mr Sarin said that Vodafone Essar would be investing $2 billion to expand infrastructure such as cell sites during this fiscal. "We will be monitoring the situation and decide how many more cell sites we need."

He also made it clear that there would be no major changes in the management team of the company under Mr Asim Ghosh.

For the time being, the new entity intends to keep its subscriber base expansion at the current level of 1.5 million per month.

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