10 December 2007
John Delaney, principal analyst at Ovum comments on:
Vodafone's Indian networking sharing
When Vodafone acquired its Indian operator, the market reacted positively, but with a wary eye on post-acquisition investment plans. The $11.1 billion that Vodafone paid for its stake in Hutchison Essar was near the upper limit of the ROI rules Vodafone has set itself. A lot of investment analysts are watching for any signs that it over-paid. Network sharing has always been a core element of Vodafone's plans to manage its Indian investments, and so details about how that will be handled have been eagerly awaited. Now at last we have them.
"Vodafone India's CEO, Asim Gosht, stated that there will be no controlling shareholder and that "it will be open to all comers".
We believe this is important, because by encompassing several operators in this way, Vodafone is able to present network sharing to the TRAI as an initiative aimed at fostering the growth of the Indian telecoms industry as a whole, not simply as something that will work to Vodafone's and Bharti's advantage. By doing that, Vodafone will be able to sail with the strong prevailing wind in Indian regulation, rather than having to tack against it."
Full commentary below:
"The key difference between the Indian strategy and the European strategy is that in Europe, the vehicle for network sharing is the 50-50 joint venture. Indus, by contrast, involves at least three operators, and could involve more in future. Vodafone India's CEO, Asim Gosht, stated that there will be no controlling shareholder and that "it will be open to all comers". We believe this is important, because by encompassing several operators in this way, Vodafone is able to present network sharing to the TRAI as an initiative aimed at fostering the growth of the Indian telecoms industry as a whole, not simply as something that will work to Vodafone's and Bharti's advantage. By doing that, Vodafone will be able to sail with the strong prevailing wind in Indian regulation, rather than having to tack against it."
"But let's not lose sight of the fact that as well as presenting an attractive prospect to the regulator, Indus will be a significant advantage to Vodafone's investment case. Switching and fibre costs are outside the scope of Indus; but the new company will still be handling around one-third of Vodafone India's projected $2 billion annual capex investment. Vodafone has made a rather deft job of setting up the vehicle for sharing that burden."
- Ends -
About Ovum:
Ovums primary activity is providing value-added advisory services and consulting to retain and project clients. The company acts as a well-respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.
Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as Alcatel-Lucent, AT&T, BT, Cable & Wireless, Cisco Systems, Deutsche Telekom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.
Ovum is part of the Datamonitor Group.
For more information, please contact:
EMEA:
Maria Di Martino
Tel: +44 (0) 20 7551 9238
Email: maria.dimartino@ovum.com
North America:
Sara Kaufman
Tel: +1 617-722-4602
Email: sara.kaufman@ovum.com
Asia-Pacific:
Tanisha Kuckreja
Tel: +61 3 9601 6723
Email: tanisha.kuckreja@ovum.com
John Delaney, principal analyst at Ovum comments on:
Vodafone's Indian networking sharing
When Vodafone acquired its Indian operator, the market reacted positively, but with a wary eye on post-acquisition investment plans. The $11.1 billion that Vodafone paid for its stake in Hutchison Essar was near the upper limit of the ROI rules Vodafone has set itself. A lot of investment analysts are watching for any signs that it over-paid. Network sharing has always been a core element of Vodafone's plans to manage its Indian investments, and so details about how that will be handled have been eagerly awaited. Now at last we have them.
"Vodafone India's CEO, Asim Gosht, stated that there will be no controlling shareholder and that "it will be open to all comers".
We believe this is important, because by encompassing several operators in this way, Vodafone is able to present network sharing to the TRAI as an initiative aimed at fostering the growth of the Indian telecoms industry as a whole, not simply as something that will work to Vodafone's and Bharti's advantage. By doing that, Vodafone will be able to sail with the strong prevailing wind in Indian regulation, rather than having to tack against it."
Full commentary below:
"The key difference between the Indian strategy and the European strategy is that in Europe, the vehicle for network sharing is the 50-50 joint venture. Indus, by contrast, involves at least three operators, and could involve more in future. Vodafone India's CEO, Asim Gosht, stated that there will be no controlling shareholder and that "it will be open to all comers". We believe this is important, because by encompassing several operators in this way, Vodafone is able to present network sharing to the TRAI as an initiative aimed at fostering the growth of the Indian telecoms industry as a whole, not simply as something that will work to Vodafone's and Bharti's advantage. By doing that, Vodafone will be able to sail with the strong prevailing wind in Indian regulation, rather than having to tack against it."
"But let's not lose sight of the fact that as well as presenting an attractive prospect to the regulator, Indus will be a significant advantage to Vodafone's investment case. Switching and fibre costs are outside the scope of Indus; but the new company will still be handling around one-third of Vodafone India's projected $2 billion annual capex investment. Vodafone has made a rather deft job of setting up the vehicle for sharing that burden."
- Ends -
About Ovum:
Ovums primary activity is providing value-added advisory services and consulting to retain and project clients. The company acts as a well-respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.
Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as Alcatel-Lucent, AT&T, BT, Cable & Wireless, Cisco Systems, Deutsche Telekom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.
Ovum is part of the Datamonitor Group.
For more information, please contact:
EMEA:
Maria Di Martino
Tel: +44 (0) 20 7551 9238
Email: maria.dimartino@ovum.com
North America:
Sara Kaufman
Tel: +1 617-722-4602
Email: sara.kaufman@ovum.com
Asia-Pacific:
Tanisha Kuckreja
Tel: +61 3 9601 6723
Email: tanisha.kuckreja@ovum.com
© Press Release 2007
