Bharti Airtel rejigs corporate structure to sharpen focus on digital

Bharti Airtel on Wednesday announced a new corporate structure to sharpen the company's focus on rapidly unfolding digital opportunities while enabling it to unlock value.

The move comes at a time when digital is turning out to be a compelling proposition for players in the Indian market, where the use of smartphones and better broadband connectivity has spurred the adoption of a new range of services.

Players are positioning themselves beyond the core telephony offerings, as they enhance digital engagement, build future streams of revenue and create brand differentiation, besides redefining themselves as a larger platform of digital services, say market watchers.

Announcing the corporate structure revamp to sharpen its gaze on digital, Bharti Airtel said the exercise would bring focus on four distinct verticals - Digital, India, International and Infrastructure.

The new structure involves Airtel Digital Limited folding into the listed entity Bharti Airtel.

Moreover, all the telecom business will be housed in a newly created entity -- Airtel Limited, a wholly-owned subsidiary of Bharti Airtel Limited.

Bharti Airtel will now house all of the digital assets spanning Wynk Music, Airtel Xstream, Airtel Thanks, Mitra Payments platform used by a million retailers, Airtel Ads, Airtel IQ, Airtel Secure, Airtel Cloud and all future digital products and services.

"It is...intended to house all the telecom businesses in a newly created entity, Airtel Limited a wholly-owned subsidiary of Bharti Airtel Limited," the company said in a statement.

Bharti Telemedia, the 100 per cent arm operating DTH services, will sit alongside Airtel Limited for now.

"It is intended to eventually fold the DTH business into Airtel Limited to move towards the NDCP vision of converged services to customers," it added.

The company has approached the government to seek clarity on licensing policy given that carriage that is telecom and DTH is currently being regulated and managed under two separate ministries of communications, and Information and Broadcasting (I and B), 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".

All of the company's infrastructure businesses such as Nxtra and Indus Towers will continue to remain separate entities as they are currently.

The same would be the case with international subsidiaries and affiliates.

"The Board in its meeting today approved the scheme enabling the company to file for all statutory approvals to give effect to the proposed rearrangement," the statement said.

Bharti Airtel chairman Sunil Mittal said, "The new structure sets the exciting future course for Bharti Airtel and provides focus on the four distinct businesses Digital, India, International and Infrastructure, each, 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 added.

It is pertinent to mention here that digital offerings have been a growing area of investment for every player operating in this space.

Jio Platforms -- that houses India's youngest but largest telecom firm Jio and apps -- has made significant investments across its digital ecosystem, powered by advanced technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.

Last year, Jio Platforms raised a staggering Rs 1,52,056 crore from marquee investors, including Facebook, Google and others pushing FDI in the sector to record highs.

Photograph: Adnan Abidi/Reuters