Hutchison Telecommunications International to acquire 49%
stake in Sterling Cellular

18 December 1999

The Essar Group and the Hutchison Whampoa Group announced today that Hutchison Telecommunications International Limited has agreed to buy 49% of the equity shares in Sterling Cellular Limited from Swisscom AG and certain other foreign shareholders. The transaction is subject to receiving necessary regulatory approvals. Essar Teleholdings Limited owns the balance 51% in Sterling Cellular and the company will continue to be managed professionally. Hutchison and Essar will also jointly explore new opportunities for investment in the telecommunications sector in India.

Commenting on the acquisition, Mr. Canning Fok, Group Managing Director, Hutchison Whampoa Limited said, "Our group is a leading cellular service provider with a long-term commitment to India. We are delighted to invest further in India through this stake in Sterling Cellular, which operates the Delhi circle, as also to have a partnership alliance with the Essar Group. We believe that this initiative will considerably enhance value to our customers and provide anchor points for further investments down the road."

"We welcome the initiatives of the new Telecom Policy and look forward to its complete and successful implementation," added Mr. Fok.

Mr. Ravi Ruia, Vice-Chairman of the Essar Group, said, "We are happy to partner with Hutchison which has demonstrated a unique ability to bring high quality, low-cost telecom services in a short time in many parts of the world. Essar is committed to growing its telecom business in the country. With this partnership, we expect to further strengthen our presence in Delhi and continue to provide the best quality services to our customers."

Sterling Cellular is one of the two licensees offering cellular services in Delhi (including Ghaziabad, Noida, Faridabad and Gurgaon). It commenced operations in January 1996 under the name of Essar Cellphone and has about 120,000 subscribers. The company expects to achieve rapid expansion in market penetration with the introduction of revenue sharing license fees as also the Calling Party Pays (CPP) regime for cellular services.

The Essar Group is one of India's major business groups with investments in Telecom, Steel, Oil and Power.

Hutchison Telecommunications International Limited is part of the Hutchison Whampoa Group which has a presence in India through Hutchison Max Telecom Ltd. with one of the largest cellular subscriber base in the country.

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