Updated April 10, 2014 8:40 a.m. ET
Pedestrians walk past a vegetable vendor sitting in front of a closed store displaying Vodafone's logo in Mumbai, India. Bloomberg News
Vodafone Group VOD.LN -0.82% Vodafone Group PLC U.K.: London GBp218.20 -1.80 -0.82% April 10, 2014 1:26 pm Volume : 29.07M P/E Ratio 0.03 Market Cap GBp58.17 Billion Dividend Yield N/A Rev. per Employee GBp457,161 04/10/14 Vodafone to Take Full Control ... 04/10/14 EU Regulators Cast Wary Eye on... 04/07/14 Cincinnati Bell to sell wirele... More quote details and news » VOD.LN in 
Your Value Your Change Short position PLC is taking full control of its Indian subsidiary after buying out minority shareholders, increasing its exposure to one of the world's fastest-growing mobile telecom markets.
The U.K.-based mobile operator is buying an 11% stake in Vodafone India Ltd. for 89 billion rupees ($1.48 billion) from Piramal Enterprises Ltd. 500302.BY +2.92% Piramal Enterprises Ltd. India: NSE र553.65 +15.70 +2.92% April 10, 2014 4:40 pm Volume : 879,760 P/E Ratio N/A Market Cap र90.94 Billion Dividend Yield 3.16% Rev. per Employee र9,811,730 04/10/14 Vodafone to Take Full Control ... More quote details and news » 500302.BY in Your Value Your Change Short position , a conglomerate with interests in real estate, pharmaceuticals and finance, Piramal's chairman said Thursday.
Separately Thursday, Vodafone said it last month completed the purchase of a 4.5% stake in the venture from Analjit Singh of Max India Ltd. 500271.BY +5.38% Max India Ltd. India: Bombay र210.55 +10.75 +5.38% April 10, 2014 5:55 pm Volume : 24,165 P/E Ratio N/A Market Cap र53.38 Billion Dividend Yield 1.71% Rev. per Employee N/A 04/10/14 Vodafone to Take Full Control ... More quote details and news » 500271.BY in Your Value Your Change Short position Vodafone didn't say how much it paid for the stake and Mr. Singh wasn't available for comment.
The two deals will result in Vodafone owning 100% of its Indian operations. It previously controlled an 84.5% stake through direct and indirect holdings, with the remainder held by Piramal and Mr. Singh.
Vodafone's decision to take full control of its Indian operations follows similar moves by other European multinationals, including Unilever ULVR.LN +0.15% Unilever PLC U.K.: London GBp2616.00 +4.00 +0.15% April 10, 2014 1:26 pm Volume : 1.12M P/E Ratio 0.19 Market Cap GBp33.52 Billion Dividend Yield N/A Rev. per Employee GBp243,076 04/10/14 Vodafone to Take Full Control ... 04/04/14 TNT Express CFO Bernard Bot to... 04/02/14 Investors Warm to Green Bonds More quote details and news » ULVR.LN in Your Value Your Change Short position PLC and GlaxoSmithKline GSK.LN +0.32% GlaxoSmithKline PLC U.K.: London GBp1586.50 +5.00 +0.32% April 10, 2014 1:26 pm Volume : 4.97M P/E Ratio 14.08 Market Cap GBp76.85 Billion Dividend Yield N/A Rev. per Employee GBp266,513 04/10/14 Vodafone to Take Full Control ... 04/09/14 Study Questions Tamiflu's Effe... 04/06/14 Glaxo Investigates Bribery Acc... More quote details and news » GSK.LN in Your Value Your Change Short position PLC, to increase their exposure to India.
India scrapped a 74% cap on foreign ownership of Indian telecom companies last July to tackle credit shortfalls and currency devaluation and the government approved Vodafone's plans to buy out its minority investors for 101.4 billion rupees ($1.69 billion) at the end of last year.
Piramal initially held its stake so that the British company would comply with India's foreign ownership rules.
Vodafone Chief Executive Vittorio Colao is prioritizing India as a key target market and said in February the operator would look to bolster its business there through deals. About 70% of Vodafone's customers are located in fast-growing telecom markets such as India, Turkey and South Africa.
India will become one of Vodafone's top two global markets after the British company sold its 45% stake in Verizon Wireless to its U.S. joint-venture partner Verizon Communications Inc. for $130 billion, Mr. Colao added, without specifying by what measure or the time frame.
In the fiscal year to the end of March 2013, Vodafone generated £4.3 billion ($7.2 billion) of revenue and over £1 billion in adjusted operating profit in India. In recent years the company has grown its business in India—where it competes with Bharti Airtel Ltd 532454.BY +0.56% Bharti Airtel Ltd. India: NSE र321.89 +1.79 +0.56% April 10, 2014 3:58 pm Volume : 6.31M P/E Ratio 54.08 Market Cap र1269.97 Billion Dividend Yield 0.31% Rev. per Employee र53,958,200 04/10/14 Vodafone to Take Full Control ... 03/11/14 Saavn plans video streaming on... 03/04/14 Safaricom, Bharti in Talks to ... More quote details and news » 532454.BY in Your Value Your Change Short position —by tapping local demand for voice communications. Through increased smartphone penetration, India also offers high growth potential from higher-margin data services, analysts say.
Vodafone, the world's second-biggest mobile operator by number of subscribers after China Mobile, had around 160 million customers in India at the end of December 2013, of which 94% were on less-loyal "prepaid" contracts.
In the three months to the end of December, Vodafone added 4.9 million mobile customers in India, while revenue before acquisitions, disposals, currency effects and excluding handset sales, rose 13%. Data usage grew 117%, primarily because of a 38% increase in mobile Internet users and a 65% increase in usage per customer, Vodafone said.
Vodafone's focus on India comes despite an as-yet unresolved long-standing $2 billion tax dispute with the Indian government, part of a larger tax offensive waged by the cash-strapped Indian state against multinationals.
Indian tax authorities in 2007 said Vodafone owed more than $2 billion in capital-gains taxes related to its acquisition of a controlling stake in an Indian phone company from Hong Kong's Hutchison Whampoa Ltd. 0013.HK +3.17% Hutchison Whampoa Ltd. Hong Kong $107.50 +3.30 +3.17% April 10, 2014 4:01 pm Volume : 8.34M P/E Ratio 14.73 Market Cap $441.26 Billion Dividend Yield 3.16% Rev. per Employee $1,024,940 04/10/14 Vodafone to Take Full Control ... 04/10/14 EU Regulators Cast Wary Eye on... 04/03/14 Vodafone to Invest $1.7 Billio... More quote details and news » 0013.HK in Your Value Your Change Short position
Vodafone is using part of the proceeds from the Verizon deal to invest an additional £7 billion ($11.7 billion) in its global networks over the two years ending March 2016, of which £700 million is earmarked for India. It has also spent around $20 billion buying fixed-line cable assets in Germany and Spain.
Write to Simon Zekaria at simon.zekaria@wsj.com and Kenan Machado at kenan.machado@wsj.com
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