Vodafone CEO Arun Sarin opened his keynote presentation today visibly pleased after finally closing the deal for a $11.1 billion stake in India's Hutchison Essar. Vodafone has expressed its interest repeatedly leading up to the deal, during months of intense negotiations.
"Personally, I'm very excited about this because it fundamentally changes the type of business that we are," Sarin said. "One of things that [GSMA CEO] Rob [Conway] just talked about was how the world is changing, how the growth is coming out of the emerging markets. This has absolutely been our strategy in the last few years. A year ago we bought a company in Turkey. Two years ago we bought companies in South Africa and Romania and Czech Republic. We've been gradually moving our business to where growth is." Other reasons Sarin said Voda shelled out billions for Essar:
- The penetration in India is just 13 percent. That's 150 million subscribers. This number is going to be 40 percent of 500 million subscribers in just a few short years.
- The minutes of use in India are 400 minutes per subscriber per month. In Europe the number is 150. In the U.S. the number is 800.
- The other thing that's really exciting for me is that the Indian government has set up good telecoms regulation that promote infrastructure building. Today only 40 percent of the country has coverage with mobility and cellular--this number is expected to go up to 50-60-70 percent in the coming years.
- Vodafone will bring new services to the country--whether information or mobile entertainment. The carrier also plans on bringing low cost handsets.
- "Bringing mobile banking and money transfer services to India is something we will do."
For more on Vodafone's Essar acquisition:
- read this article from The Wall Street Journal (sub. req.)