Biz People

Sarin spells out investment plans

Vodafone Group Plc, the world's largest mobile-phone operator by sales, plans to invest $2 billion in India this year to win more customers in the fastest-growing major wireless market.

The investments, in line with the amount spent in 2007, will be used to build telecommunications towers, set up shops and for advertising, Chief Executive Officer Arun Sarin (below left) said yesterday in New Delhi.

The Newbury, England-based company is investing in emerging markets to boost profits as subscriber growth slows at home. Vodafone took control of Hutchison Essar Ltd in May to tap a market where 874 million of India's 1.1 billion people don't yet own a mobile phone.

"We'll continue to invest to make sure that we provide a mobile phone to every Indian citizen and that's our goal," Sarin said.

Vodafone aims to sign up 100 million users in India by 2010 and may get approval to begin services in the state of Madhya Pradesh within weeks, Sarin said. The company ended 2007 with 40 million users, behind Reliance Communications Ltd and market leader Bharti Airtel Ltd.

Vodafone spent $10.7 billion for a controlling interest in Hutchison Essar, at that time India's fourth-largest operator.

Branson hopes for Indian airline

Richard Branson, who controls UK carrier Virgin Atlantic Airways Ltd, has sought permission to start a domestic airline in India, where more people have started traveling by air due to economic growth.

Billionaire Branson (above right) hopes the Indian government will change its rules on allowing foreigners to run local services, he said in New Delhi yesterday without elaborating.

India's air passenger travel is expanding at about 25 percent a year as economic growth and higher disposable incomes enable more people to shun trains. At least six discount carriers have started flights in the country of 1.1 billion people as air travel growth in India will outpace the global average until 2025, according to government estimates.

Still, India doesn't allow overseas airlines to hold stakes in local carriers directly or indirectly. In 2004, India raised the limit overseas companies, excluding airlines, can own in local airlines to 49 percent from 40 percent to enable them to get more investments.

The policy of not allowing foreign airlines in Indian carriers will be reviewed, Indian government officials have said in the past, without elaborating.

Branson's airline has domestic services in Australia with Virgin Blue, in the United States with Virgin America and in Africa with Virgin Nigeria. Virgin Galactic, takes bookings for proposed space flights.

King toppled from throne at MFS

Australian financial services firm MFS ousted its chief executive Michael King yesterday after a A$1.3 billion ($1.1 billion) deal to sell its fund management business fell through, rattling investors who worried about the company's viability.

On Friday, MFS had detailed plans to split its business into two listed groups and recapitalize them to cut debt.

Analysts taking part in a fiery conference call with former chief executive King on Friday had questioned the need for the capital raising, suggesting it implied a funding shortfall.

But King maintained the companu would have no trouble refinancing A$150 in short-term debt due in March.

MFS said in a statement that "it was considered to be in the company's best interest" that King resigned.

It added that he had voluntarily given up his right to compensation and entitlements.

(China Daily 01/22/2008 page16)