New Delhi: India’s largest telecom operator, Bharti Airtel Ltd, has created a new international division and shuffled its brass for the second time in 10 months as it prepares again to expand beyond South Asia.
Manoj Kohli, currently joint managing director and chief executive (India and South Asia), will head Bharti’s new international business group from 1 April, it said on Wednesday. Deputy CEO Sanjay Kapoor will take over as the head of the firm’s India and South Asia operations.
Analysts see the creation of the international unit as a renewal of focus for Bharti to grow overseas, especially in emerging markets, where it can replicate its low-price, high-volume model.
That’s been a Bharti ambition since it first attempted to buy South Africa’s MTN Group Ltd in 2008. After two tries, the firm gave up on MTN in October but on Tuesday announced it had bought a 70% stake in Bangladesh’s Warid Telecom International Ltd, its first successful overseas buy.
“Bangladesh was the first step forward, and by making Manoj (Kohli) the head of international business, they are giving a clear signal that more acquisitions are on the cards,” said R.K. Gupta, managing director at Taurus Asset Management Co. Ltd.
“The Indian market is kind of heading towards saturation and potential growth is becoming limited, and Bharti must have to look at lesser developed markets where penetration is low,” said Gupta, whose fund manages around $420 million (around Rs1,900 crore) and owns Bharti shares.
Handing over baton: Manoj Kohli, chief executive (India and South Asia), will be succeeded by deputy chief executive Sanjay Kapoor. Harikrishna Katragadda/Mint
Bankers and analysts have said Africa and West Asia are the most likely destinations for Bharti, with Kuwait’s Zain and Sweden-based emerging market operator Millicom International Cellular SA possible targets.
In India, the world’s fastest growing mobile market, Bharti faces increasing competition as new operators engage in a tariff war that is expected to further squeeze profit margins of telecom firms.
Bharti is the 10th largest telecom service provider in the world. It had at least 118 million subscribers in India and Sri Lanka as at end-November.
On Wednesday, the firm’s shares fell around 1% to Rs318.75 each on the Bombay Stock Exchange while the benchmark Sensex index rose 87.29 points to close at 17,509.80.
Sunil Mittal, Bharti’s chairman and managing director, said in a statement that the firm would be developing plans to cover emerging markets. “This new structure will leverage our management depth and build a strong platform for fulfilling our global vision,” he added.
In the new structure, Kapoor, who had been promoted to deputy chief executive in March from president of Bharti’s mobile services, would have end-to-end responsibility for the firm’s India and South Asia businesses.
“At different stages of growth, you need different kinds of people,” said Kunal Bajaj, managing director of strategy consulting firm BDA Connect. “Manoj (Kohli) delivered in growing the company over the last 8-10 years. Now, to take it to the next level, they need new blood.”
Both Kohli and Kapoor will continue to report to Mittal.
Bharti, owned more than 30% by SingTel, South-East Asia’s top phone firm, is scheduled to announce its December quarter results on 22 January.
Reuters contributed to this story