Competitor Insight #37.2006: Wireless Operator Competitor Analysis-- Hutchison Essar, Ltd.

The on-going battles between HTIL and Essar Group cannot be good for Hutch's operations. Already, Hutch's IPO, scheduled for early 2005, has been delayed indefinitely. This delay in raising money through the IPO will impact Hutch-Essar's network rollout plans. Some board directors may speculate that key strategic decisions, such as the focus on mobility and the premium market, may place Hutch at a competitive disadvantage in India. Since TII is partly owned by HTIL and Mr. Ghosh, the Essar Group directors may also feel that top management has the interest of the senior equity holder HTIL in mind, rather than building long-term value for all equity holders. These types of issues at the Board level always affect operations negatively. As a result, we think Hutch's senior management will likely be slower to respond to market realities. We think Hutchison-Essar is important enough to both HTIL and the Essar Group that IPO-related issues will be settled within the next year.