Bharti Airtel said that it might sell a large stake in its tower unit, Bharti Infratel, to generate funds that will be used to bolster its 4G network and better compete with Reliance Jio, which became profitable in the third quarter. Bharti Airtel and its wholly-owned subsidiaries own 53.51% in Bharti Infratel. The telco had in March last year sold a 10.3% stake in Bharti Infratel to a global consortium of private equity firm KKR and CPP Investment Board for $952 million, followed by another 3.65% stake in a secondary sale for Rs 2,570 crore in August last year. It had also raised another Rs 3,325 crore by offloading a 4.49% stake to global investors.

  • Make Telecom Talk My Trusted Source
  • Source of Google
  • Source of Google

bhartiairtel-gopalvittal

Vittal said the company’s immediate objective is “to grab a disproportionate share of 4G devices and 4G primary SIM slots on its network” to offset the impact of ARPU erosion in the telco’s running battle for market share with Mukesh Ambani’s Jio.

“The board has approved divestment of a majority stake in Bharti Infratel, and the next block would have to be a sizeable amount, although there is no immediate decision yet,” Bharti Airtel’s global chief financial officer, Nilanjan Roy, said during an earnings call while responding to an analyst’s query on a possible significant stake sale in the tower arm to generate fresh resources amid Airtel’s elevated capex requirements through FY19.

Roy said that the objective of this stake sale is to build the strategic value of our underlying telecom business, sustain revenue market share and grow the data market. He added that the impact on Airtel’s overall leverage and operating income would be assessed before any potential stake sale in the tower arm.