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Last Updated: Monday, 12 February 2007, 17:39 GMT
Indian rivals hail Vodafone deal
Vodafone chief executive Arun Sarin

Rival Indian telecoms companies have welcomed Vodafone's $11.1bn (5.7bn) purchase of a controlling stake in mobile phone firm Hutchison Essar.

Reliance Communications, which also bid for the 67% share, said the UK firm's win indicated the success and growth potential of India's mobile market.

"We congratulate Vodafone and welcome them to India," said Reliance's chief executive Anil Ambani.

Hutchison Essar is India's fourth largest mobile phone network.

Today the Indian telecom sector is one of the most sought after in the world
Bharti Airtel boss Sunil Mittal

Vodafone's purchase ends a long bidding war for the Hutchison Essar stake owned by Hong Kong's Hutchison Telecommunications.

UK firm Vodafone is moving into emerging economies to make up for slow growth in mature markets like Europe.

According to Vodafone, India is the fastest growing mobile market in the world, with around 6.5 million new subscribers every month.

'Strong endorsement'

In addition to beating Reliance, Vodafone also outbid other Indian telecoms firms Hinduja and Essar, the latter of which already owns 33% of Hutchison Essar.

It was also announced that Vodafone had sold its 5.6% stake in India's largest mobile phone group Bharti Airtel.

Vodafone has sold it back to Bharti Airtel for $1.5bn.

Bharti Airtel boss Sunil Mittal said he congratulated Vodafone on its success in buying the majority stake in Hutchison Essar.

"Today the Indian telecom sector is one of the most sought after in the world and the bid is a strong endorsement of the Government policy to promote the Indian telecom sector," said Mr Mittal.

Vodafone's shares closed up 1.3% at 151.25 pence on the London Stock Exchange.

UK telecoms analysts broadly welcomed its Hutchison Essar takeover.

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