Vodafone Group and India's Essar Group have reached an agreement on running Hutchison Essar, the Indian mobile phone operator in which Vodafone plans to acquire a controlling interest.

Under the agreement, Vodafone will have operational control of the joint venture, while Essar, which holds 33 percent of the equity, will have rights consistent with its shareholding, including proportionate board representation, Vodafone said Thursday.

Hutchison Telecommunications International Ltd. (HTIL) announced in February that it had entered into an agreement to sell its 67 percent direct and indirect equity and loan interests in Hutchison Essar to a subsidiary of Vodafone for a total cash consideration of $11.1 billion.

Under the agreement announced Thursday, Hutchison Essar will be renamed Vodafone Essar, and in due course the business will market its products and services under the Vodafone brand, Vodafone said. The services are currently being marketed under the Hutch brand.

Ravi Ruia, vice chairman of the Essar Group, will become chairman of Vodafone Essar, and Arun Sarin, CEO of Vodafone, will become the joint venture's vice chairman.

The appointment of Ruia as chairman appears to be a concession to the demand of the Essar Group that they run the Indian company jointly with Vodafone. Essar said it would cede operational control to Vodafone, but wanted to be consulted on strategic decisions relating to the joint venture.

Essar will also have certain liquidity rights. Between the third and fourth anniversaries of completion of the transaction, and subject to regulatory requirements, it will have an option to sell its 33 percent shareholding in Vodafone Essar to Vodafone for $5 billion, or an option to sell between $1 billion and $5 billion worth of Vodafone Essar shares to Vodafone at an independently appraised fair market trading value, Vodafone said.

Vodafone expects to complete the acquisition of HTIL's interest in Hutchison Essar in the coming weeks. The proposed acquisition still requires approval from India's Foreign Investment Promotion Board (FIPB).

Vodafone needs Essar as a partner because of Indian government restrictions limiting foreign equity holdings in Indian companies to 74 percent.