The Hindu Business Line : Vodafone pledges $2-b investments

Vodafone today said that it would invest $2 billion over the next couple of years to expand Hutch-Essar's reach in rural India and promised cheaper mobile rates and better services to customers.

"We will try to get more rural areas covered with this investment," said the Vodafone CEO, Mr Arun Sarin.

"The money will be invested in infrastructure and various operations and for expansion of tele-density and reach to customers."

Mr Sarin also said that customers could look forward to cheaper call rates, better handsets and value-added services once Vodaphone enters the country.

He added that he now intends to make Hutch-Essar the country's number one player with a target of 100 million customers. Hutch-Essar currently has a customer base of 24.4 million.

While Vodafone had bid $11.1 billion for Hong Kong-based Hutchison Telecom's 52 per cent stake in the mobile venture and other economic interests, the remaining 15 per cent is held by minority Indian shareholders, who have opted to continue as partners.

On Vodafone's offer to buy out the 33 per cent stakeholder Essar, Mr Sarin said that his first, second and third preferences would be that Essar should stay put.

If Essar decides to exit, Vodafone has other options, including minority shareholders increasing their stake to 26 per cent.

"This is only one option. Another obvious option is that we may go with another Indian partner."

On revamping the Hutch Essar management, Mr Sarin said that no firm decision has been taken as yet, but "my vote is with Mr Asim Ghosh as the chief."