Bharti Enterprises decision to acquire 24.5% stake in BT marks a significant milestone in Bharti Group’s history. From 1997-2001, BT owned 21% stake along with two board seats in Bharti Airtel. After Monday’s announcement, Sunil Bharti Mittal, chairman of Bharti Enterprises, spoke to a group of journalists from London via a Zoom call, on the road ahead. Excerpts:
Q. Do you think this is going to be a start for India Inc to invest abroad?
A. There are a handful of Indian companies who have been emerging as India bluechip MNCs. We have seen a variety of companies setting up shops outside and with a very large amount of investments and people. TCS, Infosys, Wipro and Tech Mahindra in IT; Godrej, Hero Motors, and Bajaj in consumer goods, are some of them. The Indian government is continuously encouraging a handful of companies who have gone global to accelerate the process. Yes, more companies will come and invest outside. For that, one thing is important that you need to be strong in your home market.
Q. How do you take forward BT from here? The UK market is not one of the emerging or a growing market, like say Africa or the India market.
A. Our exposure to the emerging market is fairly extreme. Besides India, which is a high growth market, we are also having stakes in Bangladesh, Sri Lanka, and South Asia and then 14 countries in Africa. The growth in Europe and the UK is bound to be much much lower – 1-2% a year — as they are fully developed. But the revenues are pretty large – $25 billion in current revenue and $10 billion in Ebitda for BT. In our assessment, the investment has been made at this time because BT’s strategy fairly suggests that free cashflows are significantly going to grow. I think it’s a very attractive buy. In the UK, we have many companies that are trading at low multiples.
Q. You have not chosen to take any board seat. What’s the reason?
A. As of now, we are not asking for a board seat. We got into the company through a public block and the seller also didn’t have any board seat. For me, I think I can add a tremendous amount of value within and outside the board. It will be probably in the future sometime if this particular issue needs to be addressed.
Q. Any plan on buying the remaining stake?
A. At the moment, we have applied our mind to what is available which is a 24.5% block that makes us the single largest shareholder in this iconic company. This is a very large block. We will get to understand the company better. We will see how best we can put in our ideas with theirs to improve the performance of this company.
Q. How will this tie-up will improve your operations in India?
A. No, Airtel has not made this move. This is an investment from Bharti Enterprises. Best practice sharing can always take place given the common shareholder on both sides. But Airtel at the moment is not engaged in this particular process of seeking any technology or any help from BT.
Q. Are you looking at Airtel becoming a global telecom player?
A. Airtel has been busy building in India and it will probably be focused for the next 2-3 years on missions that are still to be completed in terms of more 5G, addressing gaps of 4G, more fiber being rolled out, FWA, enterprise business and data centers. In 2-3 years time, Airtel’s cash profile looks pretty strong to us and at that point of time, a decision will be taken by the board. With large cashflows and India’s capex becoming smaller, there could be an opportunity for Airtel to go global.
Q. With regard to OneWeb, any visibility on the regulatory front to start the services?
A. We are now just waiting for the signal from the department of telecommunications (DoT) for commercial services. We have requested the government to accelerate the process because it’s much needed especially by our government agencies in very difficult remote areas. We have given an undertaking to DoT to give us permission in the interim.