India bet becomes a sure thing

When Vodafone Group forked out $13 billion for a majority stake in India's No. 4 mobile operator, Hutchison Essar, a year ago, many feared the British giant had overpaid for an investment that would take years to yield a return.
The explosion of the Indian market since then has proven them wrong.
In just a year, India has gone from an emerging market with a potential that only enormous amounts of time and money could unlock to the place where everyone -- from handset makers to equipment vendors to mobile operators -- wants to be.
At the time of Vodafone's bid, only about 13% of Indians had mobile phones. Coverage was patchy at best, focused on big cities with high population density.
Today, India is the world's fastest-growing mobile market, with eight million new subscribers coming on board a month, lured by cheap handsets and call rates as low as one U.S. cent a minute. Coverage has also improved markedly, to about 65% of the country, and will only increase.
Despite those advancements, only about a quarter of the population had a phone as of the end of last month compared with more than 100% in Western Europe.
That low penetration means the rate of growth can likely be sustained for years. And it helps explain why all telecom players want a piece of the pie.
"A large number of executives in the telecoms industry think emerging markets, and India in particular, is the place to be," said Gavin Owston, head of European telecom, media and technology investment banking for ABN Amro. He was speaking at the Telecom Finance conference in London last month.
"The country is experiencing explosive growth on a scale not predicted before it happened," he added.
At the telecom industry's largest annual gathering -- the Mobile World Congress in Barcelona this week, the rising appeal of the Indian market is a hot topic. A record number of executives from the country's top operators are attending, including Bharti Airtel Chief Executive Manoj Kohli, and are expected to outline the opportunities and challenges of this very particular market.