Ruias of the Essar Group are on a firm footing notwithstanding the outcome of the arbitration in the BPL Mobile case. Legal analysts claim that much has changed since the arbitration began. Loop Telecom, which is a majority-owned subsidiary of BPL Mobile, has telecom licence for 23 circles. In case the arbitration is in favour of Vodafone, the valuation of BPL will rise courtesy its subsidiary, Loop Telecom, through which the company has acquired a pan-India license.

Vodafone doesn’t have much to worry, since Essar would be looking for a partner to roll out its network and there would be a huge difference in the subscriber base between Vodafone (which currently has over 47 million subscribers) and Loop Telecom.

Essar’s telecom arm Essar Teleholding currently holds a 9.9% stake in BPL Mobile. Mauritius-based investment company CapitalGlobal holds 16.1% while BPL Communications has the balance 74% stake.

BPL Mobile has claimed damages amounting to Rs 1,300 crore from Vodafone Essar on the ground that an injunction on the sale of its shares has hurt the interests of its shareholders.

In 2005, Hutchison Essar had paid Rs 1,617 crore to Essar for the purchase of BPL Cellular which operated in four circles – Mumbai, Maharashtra, Tamil Nadu and Kerala. The merger of three circles was completed except for Mumbai in that very year. Essar terminated the sale of BPL Mobile citing non-receipt of clearance from the department of telecom for the merger of BPL with Hutchison Essar after its share purchase agreement expired on July 31, 2006.

Meanwhile, Vodafone Essar has claimed that the BPL Mobile shares must be transferred to the company, as the termination of the agreement was illegal.

The UK-based Vodafone plc holds a 67% equity stake in the Vodafone Essar, the third largest mobile service provider by subscriber base, in which Essar Group has 33% equity . The company was formerly Hutchison Essar.