Vodafone Still Waiting for Approval to Take Full Control of Vodafone India

Vodafone. which operates the second-biggest mobile service operation in India, measured by subscribers, wants to invest another $1.6 billion in its Vodafone India unit, to take full control with 100 percent ownership, a move made possible by a change in investment rules affecting foreign firms operating in the India mobile market.

But India's foreign investment regulator has deferred a decision on Vodafone's proposal to take full ownership of its Indian unit.

Foreign firms had been restricted to holding no more than 74 percent direct ownership of firms operating in India. Vodafone directly owns 64.38 percent of the India company.

CGP India Investments Ltd, an indirect Mauritian subsidiary of Vodafone International Holdings BV, has asked for approval to buy the stake held by minority shareholders in Vodafone India Ltd.

Vodafone entered the India market in 2007 by acquiring Hutchison Whampoa's mobile assets in an $11 billion deal. Vodafone owns direct and indirect stakes amounting to about 84.5 percent of Vodafone India.

Some predict that other foreign firms also will consider upping their stakes in India, as a result of the decision, possibly by buying out other competitors, moves which some believe could reduce the number of suppliers from 13 down to six or seven.

Most suppliers believe that would help firms gain scale and boost profit margins in the intensely-competitive Indian mobile market.

According to the Telecom Regulatory Authority of India, total mobile accounts active in India amounted to 862.62 million,  of which 708 million, or 82 percent represent primary active accounts.

But some estimate that each user has two subscriber identity modules, implying there are about 380 million actual users, about 26 per cent of the total population.

According to at least one report, of the total 150 million internet users in India, there were around 87.1 million mobile Internet users at the end of 2012.

The number of mobile Internet users in India is projected to grow to 130.6 million by March 2014 and 164.8 million by March 2015.