India hails Vodafone entry in telecom market

As per the telecom norms, an operator cannot hold more than 10 percent stake in two service providers. This is why Vodafone is shedding its stake in Bharti.

Bharti Airtel and Vodafone have also entered into a comprehensive memorandum of understanding (MoU) on a range of significant areas, including infrastructure sharing, roaming and long distance services. Bharti Airtel will be the preferred vendor of Vodafone for NLD, ILD and leased line services. Vodafone will also give 50 percent of its in-bound international roaming traffic to Bharti Airtel for three years.

The two companies will also work on a comprehensive range of significant infrastructure sharing options, including around 70,000 towers in India, enabling rapid network expansion to connect sub urban and rural areas across the country and reducing costs.

However, Bharti is in no mood to relinquish its dominant position in the telecom market.

"If Vodafone ups aggression and goes for further acquisitions (in India), we will have to up our ante... we would like to defend our legacy... we are market leaders," Mittal warned.

Reliance Communications Ltd.'s chairman Anil Ambani has also welcomed Vodafone to India, after the UK giant emerged the top bidder for Hutch-Essar.