VODAFONE ACQUIRES CONTROL OF HUTCH ESSAR IN INDIA
(11 February 2007)

Vodafone today announced that it has agreed to acquire a controlling interest in Hutchison Essar, a leading operator in the fast growing Indian mobile market, for US$11.1 billion (£5.7 billion), valuing the Indian telecoms business atUS $18.8 billion (£9.6 billion). The move gives Vodafone to a controlling position in the attractive and fast growing Indian mobile market. Vodafone also announced that it has signed a memorandum of understanding with Bharti Airtel Limited on infrastructure sharing and that it has granted an option to a Bharti group company to buy its 5.6% direct interest in Bharti.

Commenting on the transaction, Arun Sarin, Chief Executive of Vodafone, said: “We are delighted to be deepening our involvement in the Indian mobile market with the full range of Vodafone’s products, services and brand. This announcement is clear evidence of how we are executing our strategy of developing our presence in emerging markets. We have concluded this transaction within our stated financial investment criteria and we are confident that this will prove to be an excellent investment for our shareholders. Hutch Essar is an impressive, well run company that will fit well into the Vodafone Group.”

The key highlights of the deal are:

Acquisition of a controlling interest in Hutch Essar

• Vodafone announces it has agreed to acquire companies that control a 67% interest in Hutch Essar from Hutchison Telecom International Limited (“HTIL”) for a cash consideration of US$11.1 billion (£5.7 billion)
• Vodafone will assume net debt of approximately US$2.0 billion (£1.0 billion)
• The transaction implies an enterprise value of US$18.8 billion (£9.6 billion) for Hutch Essar
• The acquisition meets Vodafone’s stated financial investment criteria

Infrastructure sharing MOU with Bharti

• Whilst Hutch Essar and Bharti will continue to compete independently, Vodafone and Bharti have entered into a MOU relating to a comprehensive range of infrastructure sharing options in India between Hutch Essar and Bharti
• Infrastructure sharing is expected to reduce the total cost of delivering telecommunication services, especially in rural areas, enabling both parties to expand network coverage more quickly and to offer more affordable services to a broader base of the Indian population

Local partners

• The Essar Group (“Essar”) currently holds a 33% interest in Hutch Essar and Vodafone will make an offer to buy this stake at the equivalent price per share it has agreed with HTIL
• Vodafone’s arrangements with the other existing minority partners will result in a shareholder structure post acquisition that meets the requirements of India’s foreign ownership rules

10% economic interest in Bharti

• Vodafone has granted a Bharti group company an option, subject to completion of the Hutch Essar acquisition, to buy its 5.6% listed direct interest in Bharti for US$1.6 billion (£0.8 billion) which compares with the acquisition price of US$0.8 billion (£0.5 billion)
• If the option is not exercised, Vodafone would be able to sell this 5.6% interest
• Vodafone will retain its 4.4% indirect interest in Bharti, underpinning its ongoing relationship

Sir John Bond, Chairman of Vodafone, said: “India is destined to become one of the largest and most important mobile markets in the world and this acquisition will enable our shareholders to benefit from our increased investment in this market. We also look forward to playing our part in delivering the significant economic and social benefits which mobile telephony can bring to the people of India.”

Principal benefits

The principal benefits to Vodafone of the transaction are:

• Accelerates Vodafone’s move to a controlling position in a leading operator in the attractive and fast growing Indian mobile market
- India is the world’s 2nd most populated country with over 1.1 billion inhabitants
- India is the fastest growing major mobile market in the world, with around 6.5 million monthly net adds in the last quarter
- India benefits from strong economic fundamentals with expected real GDP growth in high single digits

• Hutch Essar delivers a strong existing platform in India
- nationwide presence with recent expansion to 22 out of 23 licence areas (“circles”)
- 23.3 million customers as at 31 December 2006, equivalent to a 16.4% nationwide market share
- year-on-year revenue growth of 51% and an EBITDA margin of 33% in the six months to 30 June 2006
- experienced and highly respected management team

• Driving additional value in Hutch Essar
- accelerated network investment driving penetration and market share growth
- infrastructure sharing MOU with Bharti plans to reduce substantially network opex and capex
- potential for Hutch Essar to bring Vodafone’s innovative products and services to the Indian market, including Vodafone’s focus on total communication solutions for customers
- Vodafone and Hutch Essar both expected to benefit from increased purchasing power and the sharing of best practices