Essar keen to dissuade Vodafone from Bharti network sharing deal

20 Feb 2007

The minority shareholder in Hutchison Essar, the Essar Group, is pushing Vodafone to ditch a planned network sharing deal with Bharti, India’s largest mobile network operator by subscribers, and instead use Essar’s own infrastructure. Prashant Ruia, a director of Essar, said yesterday that the idea of Vodafone using Essar’s own telecoms infrastructure business, Telecoms Towers and Infrastructure, for the work was ‘one of the areas’ up for discussion between Essar and Vodafone.

The planned tie-up between Vodafone and Bharti, which was announced by Vodafone two weeks ago, has proved a key sticking point in Essar’s relationship with Vodafone ever since the Newbury-based group agreed to buy Hutchison’s 67% stake in the company. Essar is thought to believe that a memorandum of understanding between Vodafone and Bharti ‘for a comprehensive range of infrastructure sharing options’ contravenes its existing shareholder agreement with Hutchison. It could, the Essar group believes, potentially breach contravene Indian corporate law too. Alongside the network sharing plan, Essar was also understood to want more board seats at the venture. It already has four of the twelve.