British telecom giant Vodafone on Friday said it is considering acquiring a controlling stake in India's fourth-largest mobile player Hutchison Essar.

"The board of Vodafone continues to believe the mobile market in India has great potential and is therefore considering the acquisition of a controlling interest in Hutch Essar," it said in a statement.

The company, however, said the process was at a very initial stage and may or may not lead to a transaction. A further announcement will be made in due course, the company said.

Telecom giant Vodafone's board of directors has mandated chief executive Arun Sarin to pursue a cash offer for India's fourth-largest mobile firm Hutchison Essar, a British media report said on Friday.

"Vodafone's board has given its chief executive Arun Sarin the go-ahead to pursue a cash offer for Hutchison Essar, which would value India's fourth mobile operator at up to 13.5 billion dollar (7 billion pound)," The Daily Telegraph said.

The daily also said that any bid is believed to be dependent on whether Vodafone manages to convince Bharti Airtel [Get Quote], India's largest mobile operator where it already has 10 per cent stake, to waive a one-year non-compete clause. Vodafone's 10 per cent stake in Bharti Airtel is worth around 1.4 billion pounds, it said.

The report said Vodafone has been trying to get an agreement in principle from Bharti Airtel's larger shareholders, Bharti Telecom and Singapore Telecom, to drop the non-competition clause for a penalty fee.

Besides Vodafone, India's Reliance Communications [Get Quote] and Malaysia's Maxis are reported to be interested in acquiring Hutch Essar. However, none of them have acknowledged that they would like to bid for Hutch Essar, nor has there been any formal bid by any of the players.

Hong Kong-based Hutchison Telecom International Ltd has 67 per cent stake in the joint venture, while India's Essar has the remaining 33 per cent.