Would rivals become allies in race for India's mobile market?

It has been regarded as the crown jewel of its owner's portfolio. Not surprising then that the fight for India's mobile market has become so intense. Maybe the heat has gotten to some of the top executives that the unthinkable might just unfold before our eyes.

In a twist of events, Vodafone Group, Reliance Communications, Essar Group and Maxis Communications may bid jointly for Hutchison Telecommunications International stake in its Indian unit.

The companies are in early talks on a joint bid to help bring down the price at which Hutchison Telecom may sell its stake in Hutchison Essar to about $14 billion from $20 billion. Hutchison Telecom owns 67 percent of Hutchison Essar, India's fourth-largest cell-phone operator, while Essar Group owns the rest.

The bidding companies may split Hutchison Essar by telecom circles, or areas. Hutchison Essar operates in 13 telecom circles in India and has 22.2 million subscribers.

Observers have argued that Hutchison Telecommunications International might not be so interested in leaving such a lucrative industry at such a booming time. This is especially since relies on India and its 67 percent Hutchison Essar stake for an estimated four-fifths of operating income.

Analysts say mobile penetration could double over two years from 12 percent now, and triple in four years. India's government expects 180 million mobile phone users by end-2007, up more than 25 percent from 143 million now.

Essar Teleholdings, which owns 33 percent of Hutchison Essar, initially offered $11 billion for the rest of the company, turning the battle for control of the Indian mobile phone company into a three way fight with Vodafone Group and Reliance Communications.

Vodafone made an approach that values Hutchison Essar at $17 billion to $18 billion.

The move might just help push the price down and succeed in catching the prey but would they eventually be willing to share the coveted prize and be contented with whatever takings they have earned? Or will the allies become foes again in the future?