Bharti Airtel to merge digital arm with itself in corporate revamp

Airtel Payments Bank will remain a separate entity under Bharti Airtel
Leading telecom services company Bharti Airtel on Wednesday announced a new corporate structure under which group firm Airtel Digital Ltd will merge into the listed entity Bharti Airtel. While tapping digital opportunities, the telecom major is attempting   to unlock value in line with other big players such as Reliance Jio, which had raised more than Rs 1.5 trillion from a clutch of investors including Google and Facebook.

The Bharti Airtel board has approved the scheme, enabling the company to file for all  statutory approvals and execute the restructuring.

Analysts said the move would help the group attract strategic and financial investors as well as scale up its digital business. The company expects to increase the digital business revenue to more than Rs 1,000 crore from Rs 100 crore now.    

Bharti Airtel Chairman Sunil Mittal said in a statement that the new structure would set the ‘’exciting future course’’ for the group and provide focus on four distinct businesses – digital, India, international and infrastructure in a ‘’razor-sharp’’ way. ‘’We believe this will provide agility, expertise and operational rigour to serve our customers brilliantly while providing flexibility to unlock value for our shareholders. This structure will serve us well over the coming years and is a win-win for all stakeholders,” Mittal said.

Stating that its digital ambition is closely intertwined with the spine that provides connectivity across the country, the company said it intended to house all telecom businesses in a newly created entity, Airtel Limited, a wholly-owned subsidiary of Bharti Airtel Limited.

Bharti Telemedia, the 100 per cent arm operating DTH (direct to home) TV services will sit alongside Airtel Limited for now. It is intended to eventually merge the DTH business into Airtel Limited to move towards converged services.

With the restructuring, Bharti Airtel will now house all the digital assets including Wynk Music, Airtel X stream, Airtel Thanks, Mitra Payments platform, Airtel Ads, Airtel IQ, Airtel Secure, Airtel Cloud and all future digital products and services.

The company has moved the government to seek clarity on licensing policy given that carriage--telecom and DTH--is currently being regulated and managed under two separate ministries of Communications and Information and Broadcasting, respectively.

Airtel Payments Bank will remain a separate entity under Bharti Airtel and work closely with the growing customer base to play a pivotal role in realising the digital opportunity that payments and financial services provide.

The company’s infrastructure businesses such as Nxtra and Indus Towers will continue to remain in separate entities as they are currently.  The status of international subsidiaries and affiliates will remain the same.

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