Airtel wants to get out of telecom towers, plans Africa unit IPO
Bharti Airtel is exploring a merger or sale of its telecom towers and planning an IPO of a minority stake in its Africa business, deals that come amid tough competition and consolidation in India’s telecom industry
Barcelona: Bharti Airtel Ltd is exploring merger and sale options for its telecom towers businesses as chairman Sunil Mittal seeks to get out of the infrastructure game and focus on connectivity.
Airtel, the world’s No.3 mobile operator 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, briefing reporters at the Mobile World Congress in Barcelona on Wednesday, backed the lead set by telecom firms in the US, now being followed in Europe, for specialists to roll up and run telecom 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 $8.8 billion.
His move to shed non-core assets follows the blockbuster entry into the Indian market by Mukesh Ambani’s Reliance Jio Infocomm Ltd that has forced rivals to merge, creating three big players in India’s telecom industry.
Indian operators, despite their strapped finances, will need to prepare for the launch of 5G services, and Mittal said he expected Bharti Airtel to continue to commit $3-$4 billion 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.
If you want to sell
Bharti Airtel controls Bharti Infratel Ltd, and also owns 42% 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 Towers that is owned by competitors Vodafone India Ltd and Idea Cellular Ltd, 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% to 53%. 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.
Committed to Africa
Bharti Airtel, present in 20 countries, said in mid-February that it was exploring an initial public offering (IPO) 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.
Bank of America Merrill Lynch has said BAIN could be valued at an enterprise value of $6.6 billion, or six times earnings before interest, tax, depreciation and amortisation (ebitda). Gupta said he was looking for a higher price.
“I think we should be much more, because we should be at $1.2 billion of EBITDA by the time (of the float),” he said. “But the markets will decide all this.” Reuters
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