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Hutchison International Telecommunications said on Wednesday it was “exploring ways” to acquire two units of BPL Communications with Essar, its joint venture partner in India.

The comments come only two weeks after the Hong Kong-based company insisted it was not involved in the BPL deal, raising questions about HTIL's relationship with its main partner in its biggest market.

Essar announced in late July that it had agreed to buy a controlling stake in BPL Communications, with the intention of merging BPL's mobile operations with Hutchison Max, Essar's joint venture with HTIL.

HTIL, which seemed to distance itself from Essar's acquisition when it was first announced saying only that it was “aware of the discussions” is now saying BPL's new assets “made sense” for the joint venture.

Essar, one of India's largest conglomerates, has helped HTIL, controlled by Hong Kong tycoon Li Ka-shing, to expand its business in the country from just over 1m subscribers in 2001 to 8.4m at the end of June.

Essar said last month it had agreed to buy a majority stake in BPL, whose wireless assets would help Hutchison Max to achieve a national footprint and compete with Airtel and Reliance, the country's two biggest mobile operators.

BPL operates in four of India's telecoms circles, or regions, three of which will be new to Hutchison Max, which currently has operations in 13 of India's 23 telecoms circles.

Tim Pennington, HTIL's chief financial officer, said on Wednesday that Essar had not asked HTIL's permission before the deal.

“They did not ask us. They kept us informed about what they were doing. They were not seeking our permission,” Mr Pennington said.

His comments came amid speculation that the relationship between HTIL and Essar has faced some difficulties. Hong Kong bankers said the two have had disagreements over the BPL deal but Mr Pennington denied the rumours.

Hutchison Max also announced on Wednesday it was in discussions to acquire a subsidiary of Essar, which has applied to operate in seven telecoms regions currently not served by the joint venture.

HTIL's turnover in India rose 46.5 per cent to HK$4.69bn ($603m) in the first half. Earnings before interest, taxes, depreciation and amortisation increased 66.7 per cent to HK$1.58bn.

But subscriber growth is slowing. HTIL added 1.28m customers in the first half of this year, down from 1.41m in the second half of last year and 1.65m in the first six months in 2004.

HTIL on Wednesday reported a net loss of HK$352m for the first six months of this year, compared with a net profit of HK$793m for the same period in 2004, when it booked HK$1.3bn from the sale of shares in Vanda, now Hutchison Global Communications, its Hong Kong unit.

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