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Vodafone India Case Study

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Vodafone India Case Study
Katherine A. Gordon
MGT 614 Global and Transnational Management
Tiffin University
June 1, 2014

Vodafone India Case Study
Introduction
Vodafone Group plc (Vodafone Group) is a British based telecommunications company that has emerged over the years to become the largest revenue earning telecommunications company. In terms of subscribers, it has over 391 million subscribers, second only to China-Mobile. Vodafone Group has been able to grow through a series of strategic decisions that has allowed them to operate their networks in over 30 countries as well as operate partner networks in over 40 countries. In 2007, Vodafone Group entered the Indian market by acquiring 67% of Hutchison Essar, one of India’s largest mobile telecommunications companies, for $11.1 billion. After the time of the acquisition, the company was rebranded which was in accordance with Vodafone Group’s practice. The company was now known as Vodafone Essar. In 2011, Vodafone Group agreed to buy out Essar and purchased their 33% stake in the business for $5.46 billion. This agreement left Vodafone Group owning 75% of the mobile phone business with the remaining shares being held by individual investors. Due to Indian law, a foreign company cannot own more than 74% of a local phone operator therefore; this agreement required Vodafone Group to ensure they were in compliance by either selling 1% of their shares of offering an initial public offering. The company was again renamed and was now known as Vodafone India (Vodafone). The initial $11.1 billion investment in India by Vodafone Group was done through a Netherlands based subsidiary. This subsidiary acquired Hong Kong based Hutchison Telecommunications International Ltd.’s stake in Hutchison Essar Ltd. Hutchison Essar Ltd was a joint venture that held and operated the telecom licenses in

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