Vodafone will look at M&A options in the country once the Indian government relaxes rules on consolidation in the mobile industry. The government is expected to consider a rules change following the completion of the 3G spectrum auction in India, which could finish as soon as this week.
The UK operator is among the bidders in the multi-billion dollar auction for 3G spectrum and, analysts reckon, once the process is complete then the leading players will consider opportunities for consolidation if, as expected, the Indian government relaxes existing ownership restrictions.
Vodafone currently holds a controlling stake in Essar, the fourth-largest mobile operator in India but has had a policy in the past of trying to build a majority stake in either the number one or two operator in any given market where it is present. In India, it could build up its position by either acquiring a smaller rival or merging with another leading player.
Analysts have suggested possible acquisition targets include local Indian rivals India Cellular and Aircel, two mid-sized mobile operators. In 2007, Vodafone paid US$10.9 billion for a controlling stake in Essar.
Total bids for 3G spectrum in India have reached about INR400 billion (US$9 billion). The auction started April 9. The most lucrative bloc of spectrum is a 3G license covering the whole of India. The leading bid for the national 3G license is currently US$2.33 billion, which is nearing twice the reserve price.
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