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Airtel shifts digital assets to Bharti

NEW DELHI: The country’s oldest private telecom operator Bharti Airtel wants to focus on digital opportunities and unlock value from new age assets such as music, cloud, payments platform, and content.
Taking a leaf out of bigger rival Reliance Jio’s playbook, the Sunil Mittal-led company is undertaking a major restructuring that will see it place all digital assets into the listed entity Bharti Airtel. These include assets such as Wynk Music, Airtel X stream, Airtel Thanks, Mitra Payments platform, Airtel Ads, and Airtel Cloud, apart from any such future product.
While doing so, it will carve out core telecom assets under this listed entity through four separate verticals — mobile, broadband and enterprise as Airtel Ltd, payments bank, infrastructure (data centres & towers), and international (which will house African operations, submarine cable and Bangladesh, Sri Lankan operations). It also plans to get the DTH business into Airtel Ltd.

The new design will help the company focus on and strengthen the digital businesses, which have been a major focal point to attract cash-rich international investors, something seen during the flood of investments that flowed into Jio Platforms that houses Reliance’s digital assets.
With a valuation in excess of Rs 4 lakh crore, Jio Platforms had raised Rs1.5 lakh crore in the middle of the pandemic last year by offloading equity to top global tech and private equity companies.
Airtel, which still lacks the depth and strength of Reliance’s digital assets, may want to follow suit.
Sunil Bharti Mittal, chairman of Bharti Airtel, said the new structure “sets the exciting future course” for the listed entity and provides focus on four distinct businesses — digital, India, international and infrastructure.
“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.
Analysts said the move undertaken by Airtel is in the right direction and will help the company focus on strengthening digital assets, which are core to creating valuation in the new-age telecom business.
“It is the getting the organisational focus right. Reliance and Jio did that and others are following, much in line with what is happening globally. Telecom companies now want to be seen as digital companies, and that’s how it should be. Telecom business is just a dumb pipe and digital is what helps unlock and drive value,” a top analyst said on condition of anonymity as his company advises Airtel.

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