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Sector
Telecoms
Size
Large Cap
Market Cap £6.77bn
Enterprise Value £8.25bn
Revenue £1.36bn
Position in Universe 63rd / 3108

India's Bharti Airtel wants to get out of towers, committed to Africa

Wed 28th February, 2018 3:06pm
* World's No.3 operator explores merger, tower assets sale 
    * Eyes float of minority stake in African unit 
    * Deals come amid tough competition, industry consolidation 
    * To commit $3-$4 bln to annual capex as 5G looms 
 
    By Douglas Busvine 
    BARCELONA, Feb 28 (Reuters) - India's Bharti Airtel 
 BRTI.NS  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 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.  urn:newsml:reuters.com:*:nL4N1Q43UD 
    Mittal, briefing reporters at the Mobile World Congress in 
Barcelona on Wednesday, 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 
$8.8 billion. 
    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 a 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-$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  BHRI.NS , and 
also owns 42 percent 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 
 VODA.NS  and Idea Cellular  IDEA.NS , which are in the process 
of merging.  urn:newsml:reuters.com:*:nL4N1N55F6 
    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 percent to 53 percent. 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 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." 
 
 (Reporting by Douglas Busvine. Editing by Jane Merriman) 
 ((douglas.busvine@tr.com; +49 69 7565 1271; Reuters Messaging: 
douglas.busvine.thomsonreuters.com@reuters.net)) 
 
Keywords: TELECOMS MOBILEWORLD/AIRTEL
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