[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 27 April 2007, 18:04 GMT 19:04 UK
Vodafone's Essar bid is approved
Vodafone chief executive officer Arun Sarin
India added about 67 million new mobile phone connections in 2006
Indian regulators have approved Vodafone's $11.1bn (5.7bn) purchase of a majority stake in Hutchison Essar.

Officials had held up approval of the deal to ensure it did not breach Indian investment rules and put too much of Hutchison into foreign hands.

The Indian finance minister will have the final say, but it is understood he will rubber-stamp Vodafone's plans.

UK-based Vodafone agreed to buy 67% of Hutchison in February to enter the world's fastest growing mobile market.

Fastest growing market

India's economy is growing fast and its burgeoning middle class means the market for mobile phones is rocketing.

Vodafone, the world's largest mobile phone firm, is looking to emerging economies like India for earnings growth as the markets of the US and Europe are becoming saturated.

We are fully satisfied with the compliance level
Ajay Dua, the Department of Industrial Policy and Promotion

Under Indian investment rules, a foreign company can only hold a maximum stake of 74% in a domestic company.

"We are fully satisfied with the compliance level," said Ajay Dua, secretary of the Department of Industrial Policy and Promotion.

Under the deal, Vodafone will buy Hong Kong-based Hutchison Telecommunications' 52% holding in the Indian mobile company and also get control of another 15B% stake separately owned by Indian investors.

The UK firm plans to increase Hutchison Essar's share of the Indian from 16% to between 20% and 25% in coming years and is eventually expected to change the brand name to its own.

India is the fastest growing mobile phone market in the world, with more than 150 million people expected to own a mobile in the next few years.


SEE ALSO
Delay for Vodafone's India deal
30 Mar 07 |  Business
Vodafone buys Indian mobile firm
11 Feb 07 |  Business
Vodafone targets Indian takeover
10 Jan 07 |  Business
Vodafone in India telecoms battle
28 Dec 06 |  Business
Vodafone 'eyes Indian expansion'
21 Dec 06 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific