Telecom giant Airtel has dropped its plans of complete corporate restructuring and will now resume operating according to the standing corporate structure as mentioned in a statement released by the company on Tuesday. The company has credited the decision to the latest reforms in the telecom sector which has resulted in making the planned changes superfluous. Airtel in its released statement said that the telecom sector reforms announced by the Indian government has substantially boosted the outlook and investor confidence for the industry and has simplified the licensing framework at the same time.
Why Corporate Restructuring isn’t Necessary?
The statement released from Airtel added that the board of directors of Airtel believe that the prevailing corporate structure of the company is ideal for leveraging the emerging opportunities and unlocking value and at the same time continue to significantly grow Airtel’s digital business. As a result, the new corporate structure which was announced on April 14, 2021, now remains renounced. The withdrawal of the proposed corporate structures was expected as soon as the government had redefined the contentious Adjusted Gross Revenue under the telecom reform package announced on September 15, 2021.
The statement in its conclusion explains that with a sturdy balance sheet and 5G ready network, the telecom giant Bharti Airtel was already in a stable position to invest belligerently in the incipient growth opportunities offered by India’s digital economy. Previously, in April 2021, Bharti Airtel had released its new corporate structure which was designed to separate the telecom business of the company from its other businesses. The new corporate structure was going to be implemented to list the digital and infrastructure assets of the company under the parent while the telecom business was going to be transferred to a completely new unit – Airtel Ltd.
The statement released by the company also informed that under a modified scheme, Airtel was going to merge its entirely owned subsidiary Telesonic Networks Limited which would result in the amalgamation of its fiber assets into Airtel and the decision was also approved by the board members. The proposed structure was planned to remove the telecom regulatory loom over Airtel’s digital business and result in the reduction of statutory liabilities related to its mobility income and ultimately enhancing the operating income of the company.
Moreover, the statement released by the company also informed that Nettle Infrastructure Investments Limited will also be merged with Airtel. The statement said that as per the previous announcements, the company will work on its plan to unify its DTH business into Airtel to move towards the NDCP vision of converged services to customers. The statement released by Airtel mentioned the four key verticals in which the company can be categorised – India, Digital, International and Infrastructure.