Vodafone (VOD) bought a majority of India’s fourth largest mobile phone operating company, Hutchison Essar. The price tag was $11.1 million. Vodafone apparently made the move because cell phone penetration in Europe is high, and subscriber growth is slowing.
Wall St. would think that the same problems apply to the US market where companies including Cingular (T), Verizon Wireless (VZ), Sprint (S) and T-Mobile are competing for subscribers in a country with much slower population growth than India or China have.
Vodafone’s market cap is not much bigger than AT&T’s, $166 billion to $142 billion. Vodafone is already in the US market through its ownership in Verizon Wireless. So, why isn’t the US moving into countries like India, where subscriber growth is on fire?
The lack of even a bid from a US carrier is telling. The big US phone companies have issues with competition from cable in their home markets, so moving abroad would seem to make a great deal of sense.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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