Vodafone plans $400m long-distance backbone in India

Vodafone is planning to invest some $400 million to set up its own fiber optic network in India, sources familiar with the matter, quoted by an Economic Times of India report, said.

The report quoted the sources as saying that although Vodafone may have an understanding with Bharti for infrastructure-sharing, this will not bar the group setting up its own national and international long distance networks.

Project details will, however, be finalized only after Vodafone acquires majority ownership in Hutchison Essar, the Economic Times report said.

The objective is to transform Hutch Essar from a 'pure mobility player' to a full-services national integrated telecom player along the lines of a Bharti Airtel, BSNL or Reliance Communications, the report said.

'Hutch Essar under Vodafone control will be positioned as an integrated telecom player with a national footprint. In such a scenario, it will no longer have to lease capacity from existing long distance networks, "the sources, quoted by the report further said..

The sources also said initial investment in laying the fiber network "could be $250 million and go all the way up to $400 million."

A key issue that remains undecided is Essar's eventual role in Hutch Essar's NLD gameplan.
According to Essar executives, its independently held NLD and ILD licenses will not be part of the deal with Vodafone the report said.