‘The rich get poorer and the poor make us richer’ is a pretty apt summation of Vodafone’s global mobile market ambitions. A rumoured US$15bn bid for control of Hutchison Essar in India would appear to bear this out. The company has now confirmed its interest.

Following speculation last week (click here), in a statement Friday the company said: “the Board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutch Essar. Such a transaction would be consistent with its stated strategy of seeking selective acquisition opportunities in developing markets.”

Such a move would beg two questions.

The first is how much longer Vodafone will continue to keep its minority stake in Verizon Wireless. Although the company is said to dislike minority stakes i developed markets, the answer to this probably lies in a fairly complex set of tax regulations and a perception that the US, so far as mobile is concerned, is actually still a developing market.

The second relates to dealings with Hutchison. Its HTIL arm, spun off in 2004, has a market value of something more than US$10bn. Aside from Hutchison Essar, it has a rather disparate portfolio of holdings in markets including Ghana, Macau, Paraguay, Sri Lanka and Thailand.

One senses this might fit neatly with Vodafone’s newfound strategy. One also thinks that unlocking the cash for transactions like this is ultimately reliant on sorting out its position in the US.
Jim Chalmers