Vodafone Essar Expects 3G Services In India To Be Costly

MUMBAI (Dow Jones)--Vodafone Essar Ltd., the Indian unit of U.K.'s Vodafone Group PLC (VOD.LN), expects prices of third-generation mobile telephony services in the country to be high, as the industry looks to recoup the funds invested to acquire radio bandwidth and roll out operations. "The reality is that everybody has paid so much money for it (3G services) that it can't be competitive," Chief Executive Marten Pieters told reporters on the sidelines of an event Tuesday. The Indian government recently auctioned radio airwaves for 3G wireless services, which saw operators pay through their nose to bag a share of the scarce bandwidth. Vodafone paid INR116.18 billion ($2.51 billion) to acquire bandwidth in 13 of India's 22 telecom service areas. Currently, call tariffs in the country are the cheapest in the world at less than a cent per minute as the price war unfolded over the past year has resulted in large carriers responding to steep rate cuts by smaller competitors and new entrants. Pieters said also that Vodafone Essar supports the listing of Indus Towers, India's largest telecom tower company with more than 100,000 towers. Indus Towers is Vodafone's joint venture with telecom operators Bharti Airtel Ltd. and Idea Cellular Ltd. -By Kenan Machado and Dhanya Ann Thoppil, Dow Jones Newswires; +91-9886929464; dhanya.thoppil@dowjones.com (END) Dow Jones Newswires July 27, 2010 10:28 ET (14:28 GMT)