Vodafone gets government support in bid for Essar

India has appeared to give its support to Vodafone's bid for Hutchison Essar, the country's fourth-largest mobile operator, with a minister saying he hopes the British firm will establish itself in India quickly, a report from the Evening Standard said.

'We do hope that Vodafone will be able to establish its footprint in India sooner rather than later,' India's Junior Minister for Industries Ashwani Kumar was quoted as saying, after meeting with Vodafone CEO Arun Sarin at the World Economic Forum in Davos. 'My sense in meeting Sarin was that things are progressing well for Vodafone.'


Earlier, Sarin acknowledged fears that Vodafone will be forced to pay too much, the report said.
Vodafone is bidding against India's Reliance Communications, the Hinduja group and Hutchison's minority partner in the venture, Essar, the report said.


Valuation estimates for Hutchison's 67% stake have climbed to as much as $20 billion from opening bids of about $13.5 billion. Vodafone is believed to have entered a tentative bid of $17 billion, the report said.


The Evening Standard report further said Vodafone, facing stagnating growth in Europe, is attracted to India's growth potential. Hutchison Essar has 22 million subscribers, far behind top operator Bharti Airtel with 150 million. But India has a population of more than one billion and fewer than two out of 100 people own a mobile.