When\u00a0 under the leadership of\u00a0 Arun Sarin ,Vodafone bought Hutchison Whampoa’s Indian telecom operations for $10.7 billion\u00a0 it was seen as a major triumph.India was supposed to be the most exciting telecom market and no price too high.However the potential Jewel in Vodafone to a Money Sucking Morass making it write down $3.3 billion of its purchase price.India’s market is unique because of the following reasons.<\/p>\n
The severe competition in the Indian market makes surviving and making profits a tough task for almost all the companies except for a few.The 3G auction concluded today is turning around to be a “Winner’s Curse” for the winning companies <\/a>.The huge capital outflow has led to a massive underperformance of the telecom sector leading some stocks to go below their all time lows.<\/p>\n India’s leading telecom operator Bharti Airtel, which won 13 circles in the auction of airwaves for third generation (3G) telephony, said it could not achieve pan-India target as auction format and spectrum shortage drove prices beyond reasonable levels.’We would like to point out that the auction format and severe spectrum shortage along with ensuing policy uncertainty, drove the prices beyond reasonable levels. As a result, we could not achieve our objective of pan-India 3G footprint in this round,’ Bharti said in a statement.Bharti, which won 13 of 22 circles, will have to pay Rs.12,295.46 crore ($2.73 billion) to the government.<\/p>\n The 3G auction, that concluded Wednesday, fetched Rs.67,718.95 crore ($15 billion) for the Indian government.Nine companies — Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications — took part in the online auction that started April 9.Among them, Etisalat and Videocon could not win a single circle.<\/p><\/blockquote>\n For Vodafone Group Plc Chief Executive Officer Vittorio Colao, India is failing to become the emerging-market powerhouse the company had hoped for.When the world\u2019s biggest mobile-phone operator agreed to buy a 67 percent stake in Hutchison Essar Ltd. for $10.7 billion in 2007, it predicted \u201cmajor contributions.\u201d Instead, Vodafone yesterday booked a $3.3 billion charge for the unit, citing \u201cintense price competition.\u201d<\/p>\n Vodafone\u2019s difficulties in India, like those of Norway\u2019s Telenor ASA, show the pitfalls of expanding in emerging markets as European phone companies counter slower growth at home. Vodafone\u2019s outlook for India soured a year after its entry, when six new national licences were awarded. Price competition has pushed call rates to among the cheapest in the world. India\u2019s seven largest operators face rates of less than 1 cent a minute.New operators \u201ctriggered very strong price declines,\u201d Colao told reporters yesterday. \u201cWe are recognizing the pricing environment is different from what we had put in the acquisition business case.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" When\u00a0 under the leadership of\u00a0 Arun Sarin ,Vodafone bought Hutchison Whampoa’s Indian telecom operations for $10.7 billion\u00a0 it was seen as a major triumph.India was supposed [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","content-type":"","footnotes":""},"categories":[63],"tags":[5774],"class_list":["post-386","post","type-post","status-publish","format-standard","hentry","category-telecommunications","tag-vodafone"],"_links":{"self":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/comments?post=386"}],"version-history":[{"count":0,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/posts\/386\/revisions"}],"wp:attachment":[{"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/media?parent=386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/categories?post=386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iiec-india.org\/greenworld\/wp-json\/wp\/v2\/tags?post=386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}India’s Telecom Operators Fork out Huge Sums to Gain Spectrum – <\/a>Yahoo<\/h3>\n
Vodafone\u2019s India \u2018Fiasco\u2019 Forces Colao to Seek Further Cuts – Reuters<\/a><\/h3>\n