Vodafone Essar

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Vodafone India [Vodafone Essar Limited]
Type Private
Founded
Headquarters Mumbai, India
Key people Asim Ghosh, CEO
Industry Telecom
Products Mobile
Telecommunication operator
Website Vodafone India

Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16 telecom circles in India [1]. Despite the name of the company, the marketing brand used is simply Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros.

Vodafone Essar provides 2G services based on 900Mhz and 1800Mhz digital GSM technology, offering voice and data services in 16 of the countries 23 licence areas.


Contents

[edit] Ownership

Vodafone Essar is owned by Vodafone 52%, Essar Group 33%, and other Indian nationals, 15%.

On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remainding 33%. The whole company was valued at USD 18.8 billion. [2] . The transaction closed on 08 May 2007.

[edit] Previous Brands

In December 2006, Hutch Essar re-launched the "Hutch" brand nationwide, consolidating its services under a single identity. The Company entered into agreement with NTT DoCoMo to launch i-mode™ mobile Internet service in India during 2007.

The company used to be named Hutchison Essar, reflecting the name of its previous owner, Hutchison. However, the brand was marketed as Hutch. After getting the necessary government approvals with regards to the acquisiton of a majority by the Vodafone Group, the company was rebranded as Vodafone Essar. The marketing brand was officially changed to Vodafone on 20 September 2007.

In Mumbai, it was earlier known by the name Orange, a brand that used to be marketed by its former owner, Hutchison. Still earlier it was known as Max Touch and AceTel even before that.

On September, 20 2007 Hutch becomes Vodafone in one of the biggest brand transition exercises in recent times.

Vodafone Essar is spending somewhere in the region of Rs 250 crores on this high-profile transition being unveiled today. Along with the transition, cheap cell phones have been launched in the Indian market under the Vodafone brand. There are plans to launch co-branded handsets sourced from global vendors as well.

A popular daily quoted a Vodafone Essar director as saying that "the objective is to leverage Vodafone Group's global scale in bringing millions of low-cost handsets from across-the-world into India."

While there is no revealing the prices of the low-cost Vodafone handsets, the industry is abuzz that prices might start at Rs 666, undercutting Reliance Communications' much-hyped 'Rang Barse' with cheap handsets beginning at Rs 777.

Meanwhile, Vodafone Essar sources said there would be no discounts or subsidized handset offers -- rather handset-bundled schemes for customers.

Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Vodafone handsets in India. Earlier this year, Vodafone penned a global low-cost handset procurement deal with ZTE.

[edit] Growth of the company as Hutchison Essar

In 1992 Hutchison Whampoa and its Indian business partner established a company that in 1994 was awarded a licence to provide mobile telecommunications services in Mumbai (formerly Bombay) and launched commercial service as Hutchison Max in November 1995. Analjit Singh of Max still holds 12% in company.

By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL that number increased to 16. In 2006, it announced the acquisition of a company that held licence applications for the seven remaining licence areas.

In a country growing as fast as India, a strategic and well managed business plan is critical to success. Initially, the company grew its business in the largest wireless markets in India - in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well known brand and large distribution network -all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User ("ARPU") than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide.

In February 2007, Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and interests) of approximately US$11.1 billion or HK$87 billion.

1992 Hutchison Whampoa and Max Group established Hutchison Max

2000 Acquisition of Delhi operations Entered Calcutta and Gujarat markets through ESSAR acquisition

2001 Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai

2003 Acquired AirCel Digilink (ADIL) which operated in Rajastan, Uttar Pradesh East and Haryana telecom circles and renamed it under Hutch brand

2004 Launched in three additional telecom circles of India namely 'Punjab', 'Uttar Pradesh West' and 'West Bengal'

2005 Acquired BPL, another mobile service provider in India

A 'You and I' print advertisement of Hutch featuring Cheeka (dog)
A 'You and I' print advertisement of Hutch featuring Cheeka (dog)

Hutch was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message Hello stands out visibly though it uses only white letters on red background. Another recent successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, Wherever you go, our network follows. The simple yet powerful advertisement campaigns won it many admirers.

[edit] Subscriber Base

The Hutch subscriber base according to COAI - Cellular Operator Association of India as of Feb 2007[3] was:

The total was 23,962,040, or 20.78% of the total 115,296,637 GSM mobile connections in India at that time.

[edit] External links


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