Vodafone, Bharti may not tango in overseas mkts

KOLKATA: Vodafone’s just-concluded Hutch Essar acquisition might impact its long-term relationship with Sunil Mittal’s Bharti Group in India. When it comes to overseas markets, things seem truly hunky-dory between the UK-based mobile operator and Bharti. A case in point are the Isles of Jersey and Guernsey (in the Channel Islands) where the Bharti-Vodafone duo decided earlier this month to ring in a host of mobile products and services under the ‘Airtel-Vodafone’ banner. Even as Bharti gears up to enter Sri Lanka’s mobile turf next, it’s unknown whether the Airtel-Vodafone brandname may also be unveiled in yet another island nation that’s closer to home.

Bharti chairman Sunil Mittal has indicated that Bharti Airtel will launch its Sri Lanka subsidiary by 2007 end. But the Bharti group spokesperson declined to respond to ET’s email (dated May 26) on whether mobile services under the ‘Airtel-Vodafone’ brandname could possibly be launched in Sri Lanka along the lines of Bharti subsidiary Jersey Airtel’s move in the Channel Islands. The decision to unfurl the latest line of Vodafone mobile products/services under the Airtel-Vodafone brand is linked to Vodafone’s ‘Partner Network Strategy’. Similar initiatives are also underway at Guernsey Island where Bharti subsidiary Guernsey Airtel is a mobile licencee.

Vodafone Group officials are also unwilling to share details. Does Vodafone propose to enter the lucrative Lanka mobile turf ? At this stage, “We have no plans to enter the Sri Lankan market,” a senior Vodafone executive told ET.

In the backdrop of Vodafone’s $10.9-billion acquisition of Hutch Essar, ET had specifically asked both Bharti and Vodafone whether a possible partnership between the two companies in Sri Lanka could trigger a clash of interests, given that Hutchison Telecom International is already an established mobile service player in Lanka.

Both Vodafone and Bharti chose not to respond. Bharti Airtel will be the first Indian cellular services provider in Sri Lanka and the fifth mobile licencee in the country after Telekom Malaysia-controlled Dialog Telecom, Mobitel Lanka, Hutchison Telecom and CellTel Lanka. It may be mentioned that Vodafone had announced plans to acquire a controlling interest in Hutch Essar back in February 2007. Since Vodafone already has a 10% interest in Bharti, it also inked an agreement with Bharti Airtel on infrastructure-sharing and gave Bharti the option to buy back its 5.6% direct stake for $1.6 billion. If Bharti does not exercise the option, Vodafone is free to sell the 5.6% direct interest to a third party.