Hutchison Essar Limited ("Hutchison Essar") today announced that it has entered into a binding conditional term sheet for the acquisition of BPL Mobile Communications Limited ('BPL Mumbai') and BPL Mobile Cellular Limited ('BPL Cellular'). It also announced that it has entered into a conditional agreement to acquire Essar Spacetel Limited ('Essar Spacetel'), a company that has applied for licences in seven licence areas not presently serviced by Hutchison Essar.

BPL Mumbai is the second largest mobile telecommunication services operator in Mumbai with 1.3 million* customers, whilst BPL Cellular operates in 3 licence areas - Maharashtra & Goa, Tamil Nadu and Kerala and has 1.5 million* customers. Hutchison Essar will pay approximately US $ 1.15 billion for these transactions, which includes the cash consideration and assumption of debt.

Essar Spacetel has applied for licences for telecommunication services in seven circles in which Hutchison Essar does not currently operate, namely Madhya Pradesh, North East, Himachal Pradesh, Bihar, Orissa, Assam, and Jammu and Kashmir. Hutchison Essar will pay approximately US $ 6 million in cash for Essar Spacetel.

When completed, these acquisitions will immediately increase Hutchison Essar's customer base to more than 12 million, and will leave it poised to become the premier pure play national mobile telecommunication services operator, covering the entire country.

Ravi Ruia, Director of Hutchison Essar and Vice Chairman of the Essar Group said, " The consolidation of BPL's mobile services and Essar Spacetel with Hutchison Essar is another significant step towards making it one of India's most valuable companies.

Hutch and BPL Mobile are among India's strongest mobile franchises and the synergy that this consolidation will bring is bound to offer high value and help us gain market share in every territory."

Dennis Lui, Director of Hutchison Essar and Chief Executive Officer of Hutchison Telecommunications International Limited said, 'These are defining acquisitions for Hutchison Essar. By giving us the ability to complete our nationwide coverage, they position us to capitalise on the tremendous growth opportunities in India.'

'This is a major investment for Hutchison Essar and clearly signals the commitment of its principal shareholders, Hutchison Telecom and Essar Group, to being a major force in shaping the mobile telecommunications scene in India," added Mr Lui.

The cost of these acquisitions will be funded by a combination of shareholder funding and external bank borrowings of Hutchison Essar. The parties will move to signing definitive agreements in relation to the acquisition of BPL Mumbai and BPL Celluar as soon as practicable. Completion of the acquisition of BPL Mumbai and Essar Spacetel are subject to regulatory approvals and other conditions.

About Hutchison Essar Limited
Hutchison Essar, with over 9.3 million* mobile users under the Hutch and Orange brands, is one of the most reputable telecom companies in India. Over the years, it has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the country' and the 'Most Creative and Most Effective Advertiser of the Year'.

About Hutchison Telecommunications International Limited

Hutchison Telecommunications International Limited (Hutchison Telecom or the Group) is a leading global provider of telecommunications services.

The Group currently offers mobile and fixed -line telecommunication services in Hong Kong, and operates or is rolling out mobile telecommunication services in Macau, India, Israel, Thailand, Sri Lanka, Ghana, Indonesia and Vietnam. It was the first provider of 3G mobile services in Hong Kong and Israel and operates brands including "Hutch", "3" and "Orange".

About the Essar Group
The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors like Steel, Shipping, Power, Oil & Gas, Telecom and Constructions. The Group has an asset base of over US $ 4.5 billion.

*Figures from Cellular Operators Association of India, as of August 2005.