By Kalpana Shah

Rumors that Vodafone CEO Arun Sarin visited India to discuss buying a stake in Hutchison-Essar, India’s fourth largest mobile telecommunications operator, proved to be justified when he spoke to reporters in the Indian capital, New Delhi.

Hutchison-EssarNew Delhi

Mr. Sarin said it would take longer than January before the bidding process ended, according to Reuters.

Vodafone is in the middle of a takeover war for Hutch-Essar as Hong Kong-based Hutchison Whampoa seeks to offload its 67 percent stake. The Essar group, which is a 33 percent owner of the telephone company, wants to buy out Hutchison in one of the hottest mobile phone markets in the world.

Other bidders have quickly emerged: Reliance Communications and a surprise suitor, the Hinduja group.

The outcome of this drama could change the fortunes of the winner. As India adds between 6 and 7 million new subscribers to its cell phone network every month, it’s rare to find a seller.

India

Hutchison Whampoa’s offering is like manna to a thirsty man, and valuations for the stake are reportedly rising rapidly. Investment bankers are valuing Hutch-Essar at $15 billion to $20 billion.

Hanging onto Bharti

Vodafone already owns nearly 10 percent of Bharti Airtel, India’s leading mobile carrier. Reuters reported Bharti Chairman Sunil Mittal said there was no question of Vodafone selling its stake in Bharti at the moment, and there was no need for Singapore Telecommunications—which owns 30.8 percent of Bharti Airtel—to be involved in discussions with Vodafone.

Bharti Airtel, India

“The question does not arise,” Reuters quoted Mr. Mittal as saying.

The Press Trust of India, a news agency, reported that Mr. Sarin met Federal Commerce Minister Kamal Nath. Although Hutch-Essar is privately held, politics and economics get inextricably linked in India.

IndiaThere are of course telecommunications regulations that don’t allow a foreign company to hold 100 percent stake in a phone company in India. So Vodafone will need a joint venture partner to push through the deal. If it were to win control, Vodafone will have a 16 percent share in the rapidly growing market of at least 147 million mobile users.