Group no. 8th cmtp
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Group no. 8th cmtp

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Group no. 8th cmtp Group no. 8th cmtp Presentation Transcript

  • Mumbai, March 5, 2008 WFA/ISA - Global Advertiser Conference 1 Presentation by:- AMIT SINGH PAVITRA KUMAR CHAURASIA SAIM ahmed Institute of Professional Education & Research THE HUTCHISON ESSAR ACQUITION: VODAFONE’S FORAY INTO AN EMERGING MARKET
  • MERGER TRANSACTION WHERE TWO FIRMS AGREE TO INTEGRATE THEIR OPERATIONS ON RELATIVELY COEQUAL BASIS BECAUSE THEY HAVE RESOURCES AND CAPABILITIES THAT TOGETHER MAY CREATE A STRONGER COMPETITIVE ADVANTAGE. ACQUISITION A TRANSACTION WHERE ONE FIRM BUYS ANOTHER FIRM WITH THE INTENT OF MORE EFFECTIVELY USING A CORE COMPETENCE BY MAKING ACQUIRED FIRM A SUSIDIARY WITHIN ITS PORTFOLIO OF BUSINESSES. Acquisitions & Mergers
  • Introduction About Hutch ESSAR HEL was one the fourth biggest player in the Indian telecom sector. It is the joint venture between HTIL and the ESSAR. Started its services in 1994 under the brand name ‘Hutch’ In the year 2000, the company introduced ‘Orange’ brand in Mumbai while continued operation in the rest of the country under the brand name of ‘Hutch’. On February 5 2005 HEL consolidated its business under a single entity called Hutchinson Man Telecom Ltd.
  • Hutch Essar was a leading Indian telecommunications mobile operator with : •23.3 million customers at 31 December 2006, •representing a 16.4% national market share. CONTD… Wherever you go, our network follows”.
  • The name Vodafone comes from Voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones.“
  • Vodafone  Vodafone started as Racal Vodafone in 1982.  It was renamed Racal Telecom in 1988.  Racal Telecom was de- merged from Racal Electronics and named the Vodafone Group in 1991.  On 29th June 1999Vodafone completed acquisition of Air touch communications.  On 28th July 2000, it reverted it to former name, Vodafone Group plc.  In 2006, GOI raised the FDI limit in the telecom sector from 49% to 74%.  Indian mobile market grew at a rapid pace.  Indian mobile customer base has been growing at the rate of five to six million every month.  Because of large rural market. Why India
  • TYPE LIMITED FOUNDED 1994 AS HUTCHISON ESSAR HEADQUARTERS MUMBAI INDUSTRY MOBILE TELECOMMUNICATION PRODUCTS MOBILE NETWORKS, TELECOM SERVICES OWNER Vodafone (67%), ESSAR(33%) EMPLOYEES Above 10,000
  • Operator Subscriber base Bharti Airtel 118,864,031 Reliance Communications 93,795,613 Vodafone Essar 91,401,959 BSNL 62,861,214 Idea Cellular 57,611,872 Tata Teleservices 57,329,449 Aircel 31,023,997 Spice 4,875,913 DOCOMO 3,042,741 All India 525,147,922 Position Of Vodafone Essar in India after acquisition of Hutch (Rank 3rd from 4th )
  • ACQUISITION DETAILS  Enterprise value of Hutchison Essar is $18.8 billion.  Value of 67% stake in Hutch Essar - $11.1 billion.  Vodafone is selling 5.6% stake in Bharti for $1.6 billion.  Vodafone will retain 4.4% in Bharti as pure financial investment.  Vodafone acquired 10% in Bharti for $1.5 billion in Oct 2005.  Vodafone and Bharti to share infrastructure.
  • BRAND IMAGE AND RECOGNITION GLOBAL PRESENCE POSITIONED AS A LEADER BETTER SERVICES FAILED TO ESTABLISH DOMINANT POSITION IN DEVELOPED MARKETS RISE IN FDI LIMITS ECONOMIC GROWTH LEADING TO HIGH INCOME IN INDIA MARKET SIZE OF INDIA (RURAL MARKET) NETWORK SHARING AGREEMENT WITH BHARTI AIRTEL STIFF COMPETITION FROM LOCAL PLAYERS AIRTEL ENTERING INTO RURAL MARKET APPROVAL TO RELIANCE FOR GSM SERVICES
  • Challenges  The Major challenge for Vodafone was the Domestic Players like: Bharti Airtel, Reliance.  The main challenge for Vodafone to expand into Rural Areas.
  • CONCLUSION  Win-win-win situation for shareholders, employees & the environment.  Improved relationships between stakeholders & has helped to ensure future growth.