‘Bharti Airtel wants to get out of tower business, committed to Africa’
Bharti Airtel is exploring merger and sale options for its mobile towers businesses, as Chairman Sunil Bharti Mittal seeks to get out of the infrastructure game and focus on connectivity.
Airtel, the world’s number three mobile operators by subscribers, also wants to float a minority stake in its African operations and sees the London Stock Exchange as a potentially attractive venue.
Mittal, at the just concluded Mobile World Congress (MWC) in Barcelona, backed the lead set by telcos in the United States, now being followed in Europe, for specialists to roll up and run mobile tower assets.
“Our position is very clear: towers are steel and concrete. They are not the domain of mobile companies,” said the 60-year-old Mittal, whose family fortune Forbes Magazine puts at $8.8billion.
His move to shed non-core assets follows the blockbuster entry into the Indian market by Mukesh Ambani’s Reliance Jio that has forced rivals to merge, creating three big players in the country of 1.3 billion people.
Indian operators, despite their strapped finances, will need to prepare for the launch of fifth-generation services, and Mittal said he expected Bharti Airtel to continue to commit $3-$4billion a year to capex.
India will roll out 5G “in step” with other parts of the world, he said, with first use cases likely to be industry applications, and in fixed-line and machine-to-machine communication.
Bharti Airtel controls Bharti Infratel Ltd., and also owns 42 per cent stake in Indus Towers Ltd, India’s largest mobile infrastructure company with nearly 123,000 towers.
Bharti Infratel said last October it was considering buying the rest of Indus that is owned by competitors Vodafone India and Idea Cellular, which are in the process of merging.
Mittal said he had a flexible approach to exiting the towers business, and had also received board approval to pursue the alternative of reducing Bharti’s stake in Infratel to below majority control.
“We have gone down from 100 per cent to 53 per cent. And our board has decided: if you want to go and sell, then sell,” said Mittal, who also chairs the GSMA industry group that hosts the annual Barcelona gathering.
Bharti Airtel, present in 20 countries, said in mid-February that it was exploring an initial public offering for Bharti Airtel International (Netherlands) B.V. (BAIN), the holding company that owns its African interests.
A listing, if it does happen, would only be of a minority stake, said Mittal: “It will remain a Bharti subsidiary. That means we are staying (in Africa).”
Vice-Chairman Akhil Gupta said London was a potentially good venue but that Bharti would rely on the advice of investment bankers, yet to be appointed for the deal, before making up its mind.