Vodafone and Essar agree partnership terms following Vodafone's acquisition of Hutchison Essar

March 15, 2007

2 Min Read

NEWBURY, U.K. -- Vodafone and Essar have reached an agreement under which they will workto continue the growth of Hutchison Essar Limited ("Hutchison Essar"),one of India's leading mobile operators. This follows Vodafone'sannouncement on 11 February 2007 that it had agreed to acquire HutchisonTelecommunications International Limited's ("HTIL") controlling interestin Hutchison Essar, in which Essar is and will continue to be a 33%shareholder.

The partners have agreed that Hutchison Essar will be renamed VodafoneEssar and, in due course, that the business will market its products andservices under the Vodafone brand.

With penetration levels of around 13%, both partners believe that thereare substantial growth opportunities in the Indian mobiletelecommunications market. Vodafone is the leading international mobileoperator with an extensive range of products and services, many of whichare not currently available in India. Essar is a major industrial groupwith a deep understanding of India and the Indian mobiletelecommunications industry. With these complementary strengthsVodafone and Essar plan to broaden Vodafone Essar's service offering andenable it to become the leader in the Indian mobile telephony market.

Commenting on the new partnership, Arun Sarin, Chief Executive ofVodafone said:

"I am delighted that Essar and Vodafone have agreed the terms of anongoing partnership. Essar has played a key role in transforming thisbusiness into a leading Indian mobile operator. We look forward toleveraging this experience and working with our partner as the companyenters its next phase of growth in the attractive Indiantelecommunications market. We will be bringing the relevant range ofVodafone products and services to the Indian consumer."

Ravi Ruia, Vice Chairman of Essar, added:

"It is terrific that we are joining with the world’s leading international mobile company. I welcome them as our partner into this successful business which we will now take forward to the next level. Essar was a founding partner in Hutchison Essar and played an active role in building the company, including extending network coverage into several profitable regional markets. By partnering with Vodafone we expect to create further value in the business.”

Under the terms of the partnership, Vodafone will have operational control of Vodafone Essar and Essar will have rights consistent with its shareholding, including proportionate Board representation. Ravi Ruia will be appointed by Vodafone as Chairman of Vodafone Essar and Arun Sarin will be appointed by Essar as Vice Chairman.

Essar will have certain liquidity rights including, between the third and fourth anniversaries of completion, and subject to regulatory requirements, an option to sell its 33% shareholding in Vodafone Essar to Vodafone for US$5 billion or an option to sell between US$1 billion and US$5 billion worth of Vodafone Essar shares to Vodafone at an independently appraised fair market trading value.Vodafone expects to complete the acquisition of HTIL's interest in Hutchison Essar in the coming weeks.

Vodafone Group plc (NYSE: VOD)

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