Airtel rules the Britannia microwaves
Bharti Global's acquisition of a strategic stake in BT (formerly British Telecom) is an unprecedented diversification for the Indian telecom industry. Sunil Mittal has pursued subscribers in Africa after building up an enviable base in his home market and has placed big bets on European satellite communications. The latest investment gives him exposure, at least as an investor, to better-yielding markets.
It also delivers technology synergies for upgrading Bharti Airtel's terrestrial and broadband networks. BT partnered Bharti Airtel at the onset of its cellular journey in India to mutual benefit. Those benefits are still on offer in the rapidly evolving telecom landscape.
Indian telcos have had a chequered history as policy changes kept the landscape uncertain for most of the previous quarter-century.
The industry suffered bruising price wars and high upfront spectrum costs that affected network upgrades. With policy becoming more stable and data consumption propping up subscriber revenue, competition in the industry is swivelling towards service quality. Bharti's move is an admission that the game has changed from chasing low-yielding subscriber volumes to lucrative enterprise and upscale personal data consumption.
Satellite communications offer an easy and quick way to roll out the latest-generation telecom networks.
Bharti's strategic stake in BT does not materially alter the pecking order of the world's most valuable telcos, which US firms dominate. Bharti Airtel will continue in 7th place, trailing Deutsche Telekom. Yet, the valuations can only change in Bharti's favour as Indian and African subscribers increase their data consumption and are willing to pay more.
