"MoU is not a definitive agreement... it is not legally binding... It is just a statement of intent," Arun Sarin, CEO, Vodafone, said after inking an agreement with its local partner Essar.

Within hours of successfully bidding for majority stake of Hutchison Telecom in the Indian venture, Vodafone had unilaterally announced Bharti as a preferred carrier for NLD and ILD traffic provoking Essar to take a hardline, including exploration of legal option.

Asked if Vodafone had not signed the MoU in lieu of getting a no-objection certificate from Bharti, where it held 9.9 per cent equity, Sarin said: "Waiver from Bharti is a self standing issue."

"After completion of transaction the issue will come up in the newly constituted Board and whoever offers us better terms will be considered," said Essar Group Vice Chairman Ravi Ruia, who now becomes chairman of the JV company.

Sarin, however, said that Vodafone was convinced that Bharti could help them penetrate the rural market through infrastructure sharing and he would like to convince his Indian partner Essar for the same.

Last month, Bharti Airtel had issued a statement, saying it has entered into a comprehensive MoU with Vodafone on a range of significant areas, including infrastructure sharing, roaming and long distance services.

"Vodafone will also give 50 per cent of its in-bound international roaming traffic to the company for three years," Bharti had said.

Sarin said that India was a large country and much of it has not been served as yet in the mobile communication, so the number one job is to serve the untapped population and the best way to do this faster is by sharing infrastructure and not duplicating towers.

"We stand completely open to others, who want to join in this endeavour...We will do it in a transparent and open way," Sarin said.

Asked about the investment Vodafone plans to make in Indian operations in view of Bharti announcing $8 billion investment by 2010, Sarin said: "I would not join issue with others, but we would put in everything that is needed to become the number one mobile company by 2010 with a market share of up to 25 per cent."

On whether Vodafone-Essar would go public, Sarin said: "Both the partners have all the capital we need and there is no plan to hit the market for at least 2-3 years." Vodafone would use its operations in 25 countries to supplement its Indian business, he said.

Sarin was of all praise for his chief executive Asim Ghosh, MD in erstwhile Hutchison-Essar, saying: "I and Ruias are here to set the targets. It is for Asim and his team to deliver. If Asim make the company number one before 2010, he is in for a big bonus."

Commenting on Vodafone-Essar reaching an agreement, Telecom Minister Dayanidhi Maran said: "It's (Vodafone) entry into Indian market will bring in more professionalism and value in Indian telecom sector because of its global experience."

The race for Hutch-Essar: Complete coverage