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Mobile phone giant Vodafone Group Plc is considering buying a controlling interest in India's Hutchison Essar, raising the prospect of a $13-billion-plus bid battle with Reliance Communications for the operator.
Here are some facts about India's Hutchison Essar:
* Established in 1994, it is India's fourth-largest mobile phone operator, offering services under the Hutch brand. With a customer base of 18.4 million or 16 percent market share, it lags Bharti on 21.5 percent, Reliance's 20.4 percent and state-run Bharat Sanchar Nigam with 16.5 percent.
* It is 67 percent owned by Hong Kong tycoon Li Ka-shing's Hutchison Telecommunications International Ltd. (HTIL). India's Essar group holds the remainder. It is the largest mobile operator in Mumbai, India's commercial capital,
with a 36 percent market share.
* At $14 billion, analysts estimate Hutchison Essar's enterprise value at 20.6 times EBITDA (earnings before interest, tax, depreciation and amortisation) in the year to March 2007, well above Bharti's 16.2 times. Average revenue per user (ARPU) is 420 rupees ($9.4) a month against an average 366 rupees for all providers.
* Its operating profit in the first six months of 2006 increased to HK$1,763 million ($227 million) compared to HK$1,208 million ($155 million) in the same period last year representing an operating profit margin of 24.9 percent.
* In October 2005, Hutchison Essar raised 19 billion rupees ($426 million) to refinance existing debt and fund capital expenditure.
* In October 2006, it completed acquisition of Essar Spacetel Ltd. for $6 million from India's diversified Essar group.
* Hutchison and Essar group are locked in a dispute over the proposed merger of another mobile operator purchased by Essar with Hutchison Essar.
* India's Essar group has first right of refusal in the event that Hutchison sells its stake to another telecom firm. It could hold out for a bigger valuation, or make a bid for the entire company itself, analysts say.
Sources: Reuters; Vodafone (www.vodafone.com); Hutchison Essar (www.htil.com) and (www.hutch.in)
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