Vodafone open to partnership in move on mobile operator The Indian government would prefer a domestic firm to take over Hutchison Essar, clouding Vodafone Group's chances of taking control of the telecommunications company, according to sources. Vodafone, the world's largest mobile-telephone firm, planned to submit a bid for Hutchison Telecommunications International's Indian unit in a few weeks, the British company's chief executive Arun Sarin said at a press conference in New Delhi. Vodafone was willing to partner with India's Essar Group in any bid, Mr Sarin added. '[The deal's] in the due diligence stage now,' a source said. Hutchison plans to have a preferred bidder selected by the Lunar New Year holiday, which begins on February 18. Indian laws allow a foreign company to own up to 74 per cent of any telecommunications firm, compared with the 49 per cent cap on companies in other industries, thanks to a change in laws last year. 'The Indian government has indicated to us that they would prefer a local bidder,' a source said. Hutchison Telecommunications, a subsidiary of Hutchison Whampoa, holds 67 per cent of Hutchison Essar, India's fourth-largest mobile-telephone company by subscribers. The remainder is held by Essar Group, an Indian conglomerate whose businesses range from shipping to energy and telecommunications. Hutchison has attracted interest from both domestic and foreign players who have valued the Indian unit at between US$14 billion and US$18 billion. Interested domestic parties include Essar Group and Reliance Communications, the second-largest mobile-telephone operator in India. Private equity players such as Kolhberg Kravis Roberts, Blackstone Group, Carlyle Group and Apax Partners are also interested in joining a Reliance bid. Essar and Reliance were arranging debt financing of more than US$10 billion that was likely to take the form of a high-yield bond sold in the international market and a loan, market sources said. Hinduja Group, an Indian conglomerate active in the oil, media and banking sectors, has also said it would like to buy Hutchison's stake in the mobile-telephone firm.