India’s Bharti Airtel has signalled that it might sell a controlling stake in Bharti Infratel, its telecom tower business, to international investors.
“Airtel has been approached by a few reputed global investors to acquire a significant stake in Infratel which, if accepted, could result in such investors acquiring control of Infratel,” the country’s largest telecom services provider said, noting there is no certainty of any transaction taking place.
The Airtel announcement comes a day after Infratel decided to consider acquiring the stake it doesn’t already own in Indus Towers, the country’s largest telecom tower business.
The Infratel board decided on Monday to “explore and evaluate [the] acquisition of [a] stake in one or more tranches in Indus Towers, with the aim of making it a subsidiary or wholly owned subsidiary of Bharti Infratel”.
Indus runs over 123,000 towers in India. If merged with Infratel, the new entity will have close to 161,000 towers across the country, representing a market share of over 40 percent.
Infratel holds a 42 percent stake in Indus, with two other major industry players – Vodafone India and Idea Cellular – owning 42 percent and 11.15 percent, respectively. US private equity firm Providence is understood to own a 4.85 percent stake in the firm as well.
Vodafone India and Idea said they were looking for options to exit their stakes in the tower business as the two companies, which are the second- and third-largest players in the market, proposed a merger in March. That month, Airtel sold a 10.3 percent stake in Infratel to a consortium of funds advised by KKR and CPPIB for $953 million. Last December, Canadian fund manager Brookfield agreed to acquire a majority stake in Reliance Communications’ portfolio of Indian telecom towers for $1.65 billion.