Hence, its companies like Vodafone that need profitable companies like Bharti more than the other way round. While Vodafones mobile revenues are growing at 4-5%, Bhartis are growing at 46%, and profits 43% year on year. Legacy telecom operators worldwide are facing a huge challenge to keep their bottomlines in shape. Their networks were created not only on high costs but parts of the network also have dated technology. Fighting nifty, modern operators in high growth markets worldwide is a big challenge. Modern operators are lowering service costs to the consumer very dramatically, affecting the growth of monolithic operators who are unable to keep pace because of higher infrastructure costs. For instance, while AT&T held 70% of the market in the US in 1984, its share is now down to just 33%.
Investors and customers have reason to be happy; the former since Vodafone has expressed its desire to increase its stake and the latter because they will now have access to a global network. With 170 million subscribers worldwide, Vodafone has targeted 10 million 3G subscribers by March 2006. Its 10% stake in BTVL must be seen in this light :as a hedge against global risks and low growth markets.