Vodafone heads to India - again

Vodafone is to take a 10 per cent "strategic interest" in Bharti Tele-Ventures, the leading mobile operator in India. The stake will cost 66.56bn rupees, which is £820m.

In a statement that outlines the complex transaction, Vodafone points to a fast-growing but still "under-penetrated" mobile market in India.

The move mirrors a stake the world's farthest-reaching operator took in China Mobile several years ago to get a foothold in that market - though in this case Vodafone is returning to India after selling an interest in a regional outfit in 2003.

In a research note Ovum service manager Robin Hearn said: "Vodafone is returning to a market from which it had been conspicuously absent, particularly given the company's stated growth aims and the market's obvious potential."

Bharti also has a fixed line business, Infotel. It has 14.1 million mobile customers, which equates to a 22 per cent market share, according to Ovum.

Speaking at the 3GSM mobile show in February this year, Bharti group MD Sunil Mittal talked up the economics of a "low-tariff model" in countries such as India and encouraged the manufacturing of ever-cheaper handsets, possibly from Chinese companies.

Vodafone's deal is split between acquiring 4.39 per cent directly from Bharti Enterprises and 5.61 per cent from bankers Warburg Pincus.