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Case Title:

Vodafone’s Strategic Move in Indian Telecom Market

Publication Year : 2007

Authors: Rajan Shah, Ruchi Mankad

Industry: Telecommunications

Region:India

Case Code: MES0070A

Teaching Note: Available

Structured Assignment: Available

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Abstract:

Vodafone was one of the world’s leading mobile telecommunication companies with interest in voice and data communications. Seeing an opportunity in India, where telecom sector was rated as the fastest-growing wireless market in the world, Vodafone acquired a 10% stake in Bharti Televentures Ltd (BTVL) in 2005. When Hutchison Whampoa Ltd (HWL), a Hong Kong based Telecommunication company declared its intentions to sell its stake in Hutchison Essar, a leading telecom player only Vodafone had publicly shown its interest in acquiring the stake. In February 2007, it acquired 67% stake in Hutchison Essar Ltd. According to analysts, the acquisition of HWL’s stake would give Vodafone a considerable access to rapidly growing Indian telecom market. But, Vodafone faced many challenges in acquiring stake in HWL. The major concern was the valuation aspect of Hutchison Essar Ltd. In the recent past, Vodafone had spent nearly $300 billion in acquisitions which had led to decline in the shareholder’s confidence. It also faced stiff competition to acquire stake in Hutchison Essar Ltd. from other bidders like Reliance Communications, Hinduja Group and Essar Group. Vodafone approached Essar to remain its local partner on which Essar’s decision was pending.

The case details about the shifting strategy of Vodafone to target emerging markets like India. It also details about the opportunities and challenges in the Indian telecom market.

Pedagogical Objectives:

  • To understand the Indian telecom market
  • To understand the market entry strategy adopted by Vodafone
  • To study the merger and acquisition as growth strategy
  • To understand the competitive scenario in Indian telecom market.

Keywords : Vodafone; Vodafone in India; Inorganic Growth strategy; Competitive Scenario; New Product Segment; Market Entry Strategies Case Study; Government Policy; Hutchison Whampoa Ltd.; Hutchison Essar Ltd.; Valuation Aspects; Indian Telecom Sector; GSM Players; Telecom Regulatory Authority of India (TRAI); Bharti Televentures Ltd. (BTVL); Cheung Kong (Holdings) Limited; 2G and 3G Services

Contents : 
Background Note
Hutchison Telecom’s Indian Operation
Vodafone Eyes India
Vodafone’s Principal Market
Vodafone’s Acquisition of Hutchinson Essar Ltd
The Prospects and Challenges
Hutchison Telecom: Key Indicators in Different Region

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