Bharti Airtel restructures to avail digital opportunities, unlock value

Telecom major Bharti Airtel Ltd. has announced a new corporate structure that will “sharpen the focus” on digital opportunities and enable it to “unlock value,” the company said in a media statement.

The listed company, also India’s largest telecom company by active subscribers, will house the digital businesses, whereas telecom services , infrastructure, the DTH business and the Africa business will be housed in subsidiaries. “The new structure sets the exciting future course for Bharti Airtel and provides focus on the four distinct businesses – Digital, India, International and Infrastructur, each, in a razor sharp way,” said Sunil MIttal, Chairman of Bharti Airtel in the statement.

In 2019, Reliance Industries Ltd. had also devised a new holding structure for its telecom and digital businesses – Reliance Jio Infocomm. That marked the beginning of an aggressive debt reduction and monetisation effort by the Mukesh Ambani – led company. Eventually, Jio Platforms raised over Rs 1.5 lakh crore by selling over 33% in equity stakes to Facebook, Google and several other strategic and financial investors.

New Structure
The key changes are

1. Airtel Digital Ltd. will fold into the listed entity Bharti Airtel which will then house Wynk Music, Airtel X stream, Airtel Thanks, Mitra Payments, Airtel Ads, Airtel IQ, Airtel Secure, Airtel Cloud and all future digital products and services.

2. All the telecom businesses will be housed in a newly created entity, Airtel Ltd. – a wholly owned subsidiary of Bharti Airtel.

3. Bharti Telemedia Ltd., the 100% arm operating DTH services will sit alongside Airtel Ltd. for now. The plan is to eventually combine the DTH business into the telecom entity (Airtel Ltd.) to offer converged services to customers. The company has sought clarity from the government on licensing policy as telecom and DTH are governed by separate ministries.

4. Airtel Payments Bank will remain a separate entity under Bharti Airtel.

5. All of the company’s infrastructure businesses such as Nxtra and Indus Towers will remain separate entities.

6. The international businesses will be held separately as well. Bloomberg