Vodafone CEO Arun Sarin feels the $55 billion British firm has the capability to do much more in India than what Hutchison Whampoa had achieved in terms of reach, innovative product offerings and profitability.
Speaking to a visiting group of media persons at the company's picturesque 70-acre headquarters at Newbury, a sleepy little town around 100 km from London, Sarin said Hutchison obviously had its own compulsions of not being able to continue in India.
"But Vodafone is in for a long innings and would fully capitalise on the opportunity we have finally got. We can offer much more to Indian consumers than Hutch," Sarin said. Offering more than Hutch would, however, be a formidable task for Sarin. Hutchison Essar is the fourth largest mobile phone company in India and its average revenue per user is the highest in India. It also has the highest revenues per minute.
Sarin said he was keen to make phone affordability a non-issue in India in "less than one year" and would look to boost user revenues further by introducing new and innovative services and by pulling more minutes away from fixed-line services. While Sarin did not want to divulge any details, Vodafone had earlier this month announced a deal with Chinese mobile manufacturer ZTE to produce a range of low-cost Vodafone-branded phones to appeal to customers in emerging markets.
"The world is changing and the growth is coming from emerging markets. We have been gradually moving our business to where the growth is and India represents a fantastic opportunity. The opportunities in India are about penetration," he said, adding there was still scope to bring down prices further in India by giving consumers better value for money.
Mobile penetration in India, the world's fastest-growing cellular market, is just 13 per 100 people, while in China, the only other country with a billion-plus population, it is 40 per cent. With more than 22 million subscribers set to join Vodafone's rolls, India would instantly become the company's third-largest market after Germany and the US.
On the delay in getting the clearance from the Foreign Investment Promotion Board (FIPB), Sarin said too much should not be read into it as regulatory approvals for deals of this size would obviously take some time. "Vodafone welcomes the questions raised by FIPB as we don't want any backdoor entry into India. Vodafone wants to be a local company in India with global roots," he said.
Asked whether he would be comfortable in working with the Essar Group, which has been a difficult partner for Hutchison, Sarin said his business was not to sit in judgement on Essar. "Both of us are starting our relationship afresh and Vodafone is sure to gain from the local expertise that the Essar group would bring to the table," he said.
