LONDON, Feb 12: British mobile phone giant Vodafone, grappling with intense competition in Europe, tapped into the booming Indian economy on Monday after winning control of Hutchison Essar for $11.1 billion.

Buying assets in emerging markets has become a priority for Vodafone as it struggles with a dramatic slowdown and saturated markets in western Europe, sector analysts said.

In a move which signalled growing enthusiasm for investing in Asian economies, Vodafone said late Sunday it would pay the equivalent of 8.5 billion euros to buy Hong Kong-based Hutchison Whampoa's 67-per cent stake in Hutchison Essar.

Vodafone has about 200 million customers around the globe and is the world's second-biggest mobile phone group after China Mobile in terms of both users and stock market capitalisation.

“This deal helps Vodafone on a couple of fronts; finally bringing it significant emerging market growth as well as providing a balance sheet catalyst,” said Merril Lynch analysts in a note to clients.

The news was also welcomed by investors who sent Vodafone's shares jumping 1.34 per cent to close at 151.25 pence. London's FTSE 100 index finished 0.46 per cent lower at 6,353.50 points.

Merrill Lynch repeated it’s 'buy' recommendation the stock and kept a 165 pence target, arguing that although the deal “looks pricey,” the quick result will be taken as good news.

Including about $2 billion worth of debt that Vodafone is to assume, the agreement values Hutchison Essar, India's fourth-biggest mobile phone operator, at about $18.8 billion.

According to Vodafone, Hutchison Essar has about 23.3 million customers nationwide in India at the end of December 2006, which was equivalent to about 16.4 per cent of the country's total mobile phone market.

Vodafone said it was targeting an increase of Indian market share to between 20 and 25 per cent in five years.

India currently has about 150 million mobile phone users and a total population of approximately 1.1 billion people.

Fierce competition in its core European markets has put Vodafone on the back foot in recent years.—AFP