Vodafone is to acquire a 10 per cent stake in Indian mobile and fixed line operator Bharti Tele-Ventures (BTVL) for £820m.
The move marks a return for Vodafone to the Indian market after an absence of two years, having sold a 23 per cent stake in a small regional operator in 2003.
Robin Hearn, a senior analyst at Ovum, welcomed the move. " All-in-all this is a good move for Vodafone's global ambitions," he said. " Although there are still plenty of growth markets out there, picking those that will deliver true value is getting harder."
Ovum believes that after a slow start in the early 1990s the Indian mobile market is improving, and that Bharti has an established national brand.
Some 65 million Indians use mobile phones, representing only six per cent of the potential market. BTVL has 14.1 million mobile customers, a 22 per cent market share.
BTVL also has a fixed line business in a market where penetration runs at only four per cent. Vodafone said that BTVL recorded 39 per cent fixed-line customer growth in the six months ending in September.
Arun Sarin, chief executive at Vodafone, said: "I am delighted to announce this strategic partnership with BTVL, the leading national mobile operator in India. Together we will take this venture to a new level as clear leader in this market."
Although the announcement has been received well by analysts, an air of farce marred the press conference to launch the news.
A Daily Telegraph reporter said: "Half way through, the power cut out in Delhi and the lines went down. Vodafone boss Sarin was forced to call back on his mobile."
Sarin replied: "As is evident, mobiles are better than the wired service here."
Developing economies are high on the agenda at Vodafone. It has made investments in Romania and the Czech Republic this year, and is expected to seal a deal in Turkey by the end of the year.