Posted by telcobizpedia on August 25, 2009
On 25 Aug 2009, 0720 hrs IST, ET Bureau at http://economictimes.indiatimes.com/Mittal-MTN-chief-meet-Pranab-Khurshid-to-discuss-merger/articleshow/4931103.cms
NEW DELHI: Bharti group chairman Sunil Mittal and South African company MTN’s chief executive Phuthuma Nhleko met finance minister Pranab Mukherjee and minister of state for corporate affairs Salman Khurshid on Monday, triggering speculation about the motive for the meeting days after the merger partners extended exclusive talks for their proposed $23-billion deal.
The meeting with the finance minister comes just three days after both the telcos extended their exclusive merger talks by another month to September-end.
Mr Khurshid said the meeting was just a courtesy call by the honchos to appraise the ministry on the merger talks. Terming the proposed deal as a very big opportunity for the country, he said: “They are in touch with the regulators and the finance ministry. Our (ministry of corporate affairs) role comes at a later stage.”
The nature of the discussions with Mr Mukherjee was not disclosed and both Mr Mittal and Mr Nhleko could not be contacted on this issue. Mr Mukherjee was not available for comments. Officials at the ministry, too, declined to disclose the agenda for the meeting.
The largest telcos in India and Africa have been involved in exclusive talks for close to three months to create the world’s third-largest communications firm. The deal’s contours present a complex structure in which both firms would pay cash and equity for stakes in each other. If the deal goes through, Bharti Airtel will get 49% in MTN and the South African telco and its shareholders will get 36% economic interest in Bharti.
Industry analysts say the most probable reason for the highest ranking executives from both the companies meeting the finance minister could be related to the country’s foreign investment cap of 74% in telecom firms. It is also possible that Mr Mittal and Mr Nhleko could have updated the finance minister on the talks between the companies.
The new FDI norms consider a company Indian if Indian promoters hold a majority stake in it and the investments made by such companies in any joint venture or downstream venture will be treated as Indian.
Bharti Airtel, which had close to 70% foreign equity as per the old guidelines, has only about 43% FDI under the new norms. This is because a significant part of the Singapore-based telco SingTel’s 31% holding in the company as well as Vodafone’s entire holdings are routed through majority-owned Indian companies. Even after the deal, the emerging entity will, therefore, have FDI within the prescribed limit.
Despite this, approval from Indian regulators and the government may still turn out to be a tricky issue. RBI has asked the department of economic affairs under the finance ministry to review the new FDI guidelines. Any changes in the FDI norms could force both the companies to restructure the deal. Besides, the foreign investment promotion board, the apex body that clears foreign investments, has not cleared any proposals so far under the new norms due to opposition from the finance ministry.
Analysts, therefore, speculate that the honchos may have sought clarity from Mr Mukherjee regarding the government’s position on the new FDI norms. They feel that the meeting with Mr Khurshid could be related to Bharti’s plans to issue GDRs to MTN shareholders.
The Indian telco’s equity expansion will only be in the form of GDRs that will be listed on the Johannesburg Stock Exchange. This means, MTN’s proposed 36% holding in Bharti Airtel — 25% with the company and the rest with its shareholders — would be in the form of GDRs listed on JSE.
All regulations related to GDRs are governed by the ministry of corporate affairs. Post the deal, both the telcos will have to get a formal approval from markets regulator Sebi, exempting the South African firm from making an open offer for an additional 20% in the Indian company.
Posted in Bharti Airtel, Government, Govt Financials, Mergers, Statutory And Regulatory | Tagged: Bhart Airtel, Government, ministry, MTN, Phuthuma Nhleko, Pranab Mukherjee, Salman Khurshid, shareholding, subscribers, Sunil Mittal | Leave a Comment »
Posted by telcobizpedia on August 24, 2009
From http://online.wsj.com/article/SB125084972837849039.html?mod=rss_india_news on August 24, 2009
Bharti Airtel Ltd. Chairman and Managing Director Sunil Mittal said the second extension to talks with MTN Group Ltd. of South Africa signals that a deal may be worked out this time around.
“It gives us more confidence, but you never know with these things until the last moment,” Mr. Mittal said in an interview Friday.
Mr. Mittal’s comments came after Bharti and MTN extended their talks until Sept. 30 without giving a reason.
MTN and Bharti, India’s largest mobile-phone operator by subscribers, in May revived talks to create a telecommunications company with annual revenue of at least $20 billion and 200 million subscribers.
People familiar with the situation said Friday that Bharti and MTN have extended their talks to settle differences on pricing and the makeup of the combined entity’s board. The two companies have described their prospective deal as a $23 billion merger.
Mr. Mittal said he wasn’t in a position to confirm or deny whether Bharti would sweeten its offer.
A second person said MTN’s management and some shareholders are asking for an additional $1 billion from Bharti to complete the deal.
The person said there will be more clarity when MTN releases its half-year earnings on Thursday.
The basic terms announced in May would see Bharti accumulate a 49% stake in MTN, buying a stake directly for cash and newly issued global depository receipts, plus receiving MTN shares as part of the swap.
MTN would buy a 25% stake in Bharti for $2.9 billion in cash plus new shares, while stock received by its shareholders would take its stake in Bharti to about 36%.
Posted in Bharti Airtel, Business, Joint Venture, Mergers, Revenue Performance Etc, Telcos' Composition | Tagged: Bharti Airtel, MTN, shareholding, subscribers, Sunil Mittal | Leave a Comment »
Posted by telcobizpedia on August 24, 2009
NEW DELHI — Bharti Airtel Ltd. Chairman Sunil Mittal and MTN Group Ltd. Chief Executive Phuthuma Nhleko met Monday with India’s federal Finance Minister Pranab Mukherjee as the two companies strive to come closer to a deal to combine.
The meeting comes as Bharti, India’s biggest wireless operator by subscribers, and South Africa’s MTN last week extended their merger talks for the second time to Sept. 30.
The agenda of the meeting with the finance minister wasn’t disclosed, and Messrs. Mittal and Nhleko declined to comment when approached by Dow Jones Newswires after the meeting.
Finance ministry officials also declined to comment on the minister’s talks with Bharti and MTN executives.
Bharti and MTN have been in talks for more than two months on a complex cash and share swap, which they say would be a $23 billion merger.
On Friday, Mr. Mittal told Dow Jones Newswires the second extension to talks with MTN signals that a deal may be worked out this time around. But people familiar with the matter said there are still differences on pricing and the makeup of the combined entity’s board.
Some analysts speculate that the companies’ meeting with the finance minister could be related to foreign ownership laws for telecom firms in India. A foreign company isn’t allowed to own more than 74% in local telecommunications operators.
The basic terms announced in May would see Bharti accumulate a 49% stake in MTN, buying a stake directly for cash and newly issued global depositary receipts, plus receiving MTN shares as part of a swap. MTN would buy a 25% stake in Bharti for $2.9 billion in cash plus new shares, while stock received by its shareholders would take its stake in Bharti to about 36%.
Bharti is 30%-owned by Singapore Telecommunications Ltd.
Posted in Bharti Airtel, Government, Joint Venture | Tagged: Bharti Airtel, Government, MTN, Phuthuma Nhleko, shareholding, Sunil Mittal | Leave a Comment »
Posted by telcobizpedia on May 28, 2009
From The Hindu Business Line on 28 May 2009
Posted in Uncategorized | Tagged: Airtel, Bharti, BT Global Services, SingTel, Skycell, Sunil Mittal, Telecom Italia, walmart | Leave a Comment »
Posted by telcobizpedia on May 18, 2009
18 May 2009, 0111 hrs IST, Joji Thomas Philip & Rashmi Pratap, ET Bureau
NEW DELHI / MUMBAI: The Congress-led United Progressive Alliance’s return to power with a clear mandate will allow the combine usher in much-needed reforms in this sector, notably a new spectrum policy and listing of government-owned telco Bharat Sanchar Nigam (BSNL).
Finally, India’s mobile phone users can also look to enjoy high-end services such as high-speed internet and video conferencing, as the new government speeds up the auction process for third generation spectrum. The 3G auctions have been postponed many times since 2007 due to constant sparring among the ministries of finance, defence and communications.
But the thumping win by the Congress-led alliance may see the party get the telecom portfolio, which will enable it to push for the 3G auctions and double the floor price of these airwaves to over Rs 4,000 crore as demanded by the finance ministry. The DMK’s A Raja, who held the telecom portfolio in the earlier regime, was opposed to hiking the 3G auction base price.
The UPA is also set introduce more rural India-oriented policies—besides taking high-speed internet to villages, the new government is also expected to usher in mobile number portability before the year-end. BSNL’s listing is also on the cards, say industry observers. The previous government was forced to drop plans for the country’s largest listing yet as again, Mr Raja was reluctant to pursue it.
The sector can also expect to see the introduction a new spectrum allotment policy as the UPA would want to bury all ongoing controversies associated with the allotment of airwaves. Spectrum-related controversies have plagued the country’s telecoms sector for years, and the DMK ministers had failed to come up with a comprehensive solution.
“The telecom sector needs a stable spectrum allocation policy. Be it linked with the subscriber base or through auctions, we want more spectrum and a stable regime,” Bharti Airtel chairman and managing director Sunil Bharti Mittal told ET.
The clear verdict will enable the new government overcome opposition from vested interests who are opposed to massive policy changes aimed at giving a boost to the sector whose growth has a direct bearing on the country’s GDP. The government is also set to address a long pending demand by the industry to reduce and simplify the existing levy structure.
Indian consumers enjoy the world’s lowest tariffs despite its telcos being subject to the highest levies globally, where they have to share 25-30% of their annual revenues as different forms of taxes.
“The new government should simplify the existing levy structure. There different levies for mobile, domestic long distance, spectrum charges and so on. There is also different levies for different areas. Service tax, licence fee, microwave fees… there needs to be some uniformity in levy structure for all segments,” Mr Mittal said.
The UPA may also revive its plan to try and make available free-broadband facility for a sizeable section of the population.
Shortly after this grand plan was announced in 2007, the then communications and IT minister, Dayanidhi Maran, was forced to quit. The proposal could not be implemented as it was not on the agenda of Mr Raja, his successor.
Posted in Bharti Airtel, BSNL, Government, Spectrum | Tagged: 3G, A Raja, Airtel, Bharti, Broadband, BSNL, communications ministry, disinvestment, elections, Government, levy, license, rural, Spectrum, Sunil Mittal, video | Leave a Comment »
Posted by telcobizpedia on May 16, 2009
On www.economictimes.com of 16 May 2009, 2210 hrs IST, AGENCIES
NEW DELHI: Bharti Airtel Limited chairman Sunil Mittal expects to add another 100 million users to its kitty in the coming years. Mittal said India had emerged as dominant player in the field of telecommunications.
“For the first time, India has emerged as a dominant player in one field and that is telecommunications. I have no doubt of going forwards in next five to seven years. India would cross several more 100 million customers. There would be other countries that would follow this number of 100 million. Overall some estimates suggest that we should be looking at 75 per cent of the tele-density and that means 800-750 million customers. Therefore our resolve to start the clock one more time and say how we get to our next 100 million customers,” said Mittal.
60 per cent of the company’s subscriber base is in the rural areas, which was once considered unviable. India has second-largest telecom user base in the world after China and ahead of the US. Now, it has 429.72 million telecom subscribers, both in the wireless and mobile segments, with a record growth of 59.48 per cent last fiscal.
Posted in Uncategorized | Tagged: Airtel, Bharti, Sunil Mittal | Leave a Comment »
Posted by telcobizpedia on May 16, 2009
16 May 2009, 0059 hrs IST, TNN
NEW DELHI: Bharti Airtel’s
subscriber base has crossed the 10 crore (100 million) mark, making it the sixth largest telecom service provider in the world. However, considering single country mobile service operator, the company has become the third largest player after China Mobile and China Unicom. Mobile phone customers account for a major portion of Bharti’s subscribers base.
“This is a great achievement for the company. A couple of years back, crossing even the 25 million subscriber base was a dream. At that time few companies like Telefonica, Orange, Deutsche Telecome had that many subscriber base,” said Sunil Bharti Mittal, chairman and group CEO of Bharti Enterprise.
The company reached the first 2.5 crore (25 million) customers mark in July 2006 after around 12 years of operations. As it grew, the growth rate accelerated. The next 2.5 crore customers were added by October 2007 to double the base to 5 crore. For another 2.5 crore subscribers, the company took only 10 months. So, By August 2008, its user base was 7.5 crore. In nine months after that it added another 2.5 crore customers to cross the 10 crore mark. At present, it is adding on an average around 30 lakh customers every month.
“The Indian telecom sector, seen as providing the most affordable services in the world, has grown by leaps and bounds in the last decade. This remarkable journey to 100 million customers is a testament to the vision and commitment of a company that benchmarks itself with the best in the world,” Mittal said.
Despite stiff competition from players like Vodafone, Reliance Communication, BSNL and Idea among others, Bharti Airtel has a market share of almost 33% in mobile segment. At present, around 60% of Airtel’s customer additions come from rural areas. It has already set up 14,000 Airtel Service Centres in rural areas and planning to have 1 lakh such centres across the country by March, 2010.
After achieving this land mark, the next big challenge for Sunil Mittal is to globalise his company. He is satisfied with his position in the country. “We are ahead by 25 million (2.5 crore) customers to our nearest competitor in the domestic market,” he said. However, he is looking for an acquisition opportunity to enter in the emerging market like Africa and Middle East.
Posted in Uncategorized | Tagged: Bharti Airtel, BSNL. Idea, Deutsche Telecome, Orange, Reliance Communication, Sunil Mittal, Telefonica, Vodafone | Leave a Comment »
Posted by telcobizpedia on May 3, 2009
From The Hindu on 03 May, 2009
NEW DELHI: Targeting 55 million farmers under its fold, Indian Farmers Fertiliser Cooperative (IFFCO) on Friday announced a joint venture with telecom major Bharti Airtel to provide a boost to Indian agriculture and rural economy at large.
The joint venture company, IFFCO Kisan Sanchar Ltd (IKSL), will harness the power of telecom to add value to the farm sector and empower the rural farmer by giving him access to vital information, which will enhance his livelihood and quality of life.
In the joint venture, IFFCO will have the majority 50 per cent stake while Airtel and Star Global will have 25 per cent equity each, IKSL Managing Director, Rakesh Kapur, said.
Airtel has created a value added platform to offer free daily voice updates on mandi prices, farming techniques, weather forecasts and fertilizer availability to the farmers, Bharti Group Chairman, Sunil Mittal, said here adding that they had already enrolled over 48,000 farmers under this scheme. He said at present 40 per cent of Airtel customers come from rural areas.
By 2010, the rural population was likely to touch 800 million and two-thirds of those would be prospective mobile users, he said, adding that the rural market was worth Rs. 40,000 crore.
‘Sanchar Hat’, the value added platform, will be launched this month in Gujarat while the next roll-out will be in Madhya Pradesh, Chhattisgarh and Maharashtra. At present, this was available in Punjab, Harayna, Rajasthan, Uttar Pradesh, Tamil Nadu and Bihar, Mr. Kapur said, adding that the scheme would cover the whole country by the end of this fiscal.
The platform will help make available voice advices in all local languages. The Indian farmer will be able to look forward to the benefits of mobile telephony and Internet.
According to Mr. Mittal, Bharti Airtel will become the top rural telecom brand in the next two years. “We feel there is a great opportunity in the telecom sector going to rural India to create new businesses for the cooperatives where farmers are the key stakeholders,” IFFCO Managing Director, U. S. Awasthi, said and added that the revolution being ushered in would benefit rural masses.
Bharti Airtel will offer competitive calling rates at 50 paise per minute for calls between IFFCO members. This is expected to promote community building within the society and rural community at large. Bharti Airtel will also set up towers at sites provided by IFFCO societies to provide quality services to farmers.
Posted in Joint Venture | Tagged: Airtel, Bharti, IFFCO, IKSL, Kisan, Rakesh Kapur, rural, shareholding, Star Global, Sunil Mittal, tariff, VAS | Leave a Comment »