Bharti Airtel: Still Keen on M&As in Emerging Markets
November, 17th 2009
Bharti Airtel Ltd. is still keen on mergers and acquisitions in emerging markets, but the company isn't in any talks at present, Chief Executive Manoj Kohli said Tuesday.
"We remain interested (in acquisitions) but we're saying that with this pause we are trying to reassess opportunities and reassess how we can consolidate our leadership in India and how we can grow in other non-wireless businesses," Mr. Kohli told Dow Jones Newswires in an interview.
Earlier this year, Bharti, India's largest telecom operator by subscribers, held merger talks with South Africa's MTN Group for a second time, but the complex $24 billion merger ultimately fell through due to regulatory hurdles.
Since then, there has been speculation that Bharti may try to sign a deal with Kuwait's Zain Group, which has operations in Africa and the Middle East. But Mr. Kohli dispelled any speculation about an imminent deal.
"Today, we don't have anything specific on the table," he said.
Bharti, like other wireless operators globally, has been looking overseas to generate growth as revenue growth slows in its home turf. Indian operators are struggling with stiffer competition and lower tariffs as more customers are being added from rural areas.
To generate growth at home, the company is banking on two new areas including mobile commerce - which allows banking services on cellphones - and mobile entertainment, which would bring entertainment content via mobile devices.
"Over the next six to 12 months, both these services will pick up," said the executive.
Mr. Kohli also said Bharti is evaluating outsourcing its transport network operations.
"That's under evaluation and we should have a decision in the next few months," he said.
He declined to name the companies it is in talks with for outsourcing.
Earlier this year, Bharti gave a $500 million order to its joint venture with France's Alcatel-Lucent to manage its fixed-line services, install phone connections and repair faults.
"In the next year or so, we will outsource some more internal activity with our strategic partners," said Mr. Kohli, noting that outsourcing has the benefits of improving quality and cost efficiency.
The comments came as Bharti Tuesday launched a wholesale network called Far-East Connect, which opens up direct connectivity between Singapore and the U.S. via the Asia America Gateway cable landing in Hong Kong.
Bharti has invested more than $500 million over the last two years on submarine cables. It plans to launch another four cables within the next 12 months, said Mr. Kohli