Airtel to spend $3.5 bn in FY’10 (India)

January 23, 2009 at 20:27 Leave a comment

India’s largest mobile operator Bharti Airtel said on Thursday that it would invest about USD 3.5 billion in the next fiscal in telecom operations and in rolling out passive infrastructure. Bharti also said that it is on track to spend the same amount in the current fiscal.

“On mobile telecom operations-side the investment would be about USD 2-2.5 billion and the tower business-side between Bharti Infratel and Indus we should be spending between 2.5 and USD 3 billion in FY10. But in Indus (which is a tower tripartite venture of Vodafone Essar, Idea and Bharti) we have 42 per cent share so the exact investment in the tower business will come down to USD one billion making it the same as last year’s capex of USD 3.5 billion,” Bharti Enterprises MD Akhil Gupta said in New Delhi.

Overall capital expenditure will be USD 3.5 billion ballpark, but we will know the exact amount by the end of the next quarter, he said.

He said the company need not raise any funding for mobile operations but in the tower companies — Bharti Infratel and Indus — there will be a need to raise debt to fund the expansion.

While Indus has 93,000 towers, Bharti Infratel, which is a wholly-owned business of Bharti Enterprises, has 30,000 towers. Overall, Bharti’s share comes to 61,000 towers on a proportionate basis as it holds 42 per cent in Indus towers.

“Both will require debt funding,” he said but did not share the amount saying it is competitive information. Whatever required would be raised on need basis. Our net debt is very low — net debt to equity is just 0.19.”

Gupta ruled out any further stake sale for the moment in Infratel, which already has global investors like KKR, Singapore government’s investment arm, Temasek Holdings and other leading global investors hold about 10 per cent stake in Bharti Infratel.

New York-based private equity (PE) firm Kohlberg Kravis Roberts and Co (KKR) has invested USD 250 million (Rs990 crore) in Bharti Infratel Ltd. The arm attracts an enterprise valuation of the company of USD 12.5 billion.

“We raised some money last year from selling Bharti Infratel stakes… there is immediate plan to monetise its assets further,” He said.

He said Bharti did bid for the Iran license and it lost which ultimately went to Etisalat. “Either they were too aggressive or we were too mild,” he said. Bharti Airtel shares were trading at 4.87 per cent higher at Rs 612.

Wireless Industry News

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Entry filed under: Airtel, Asia, Bharti, Essar, Financial, idea, India, Mobile Network Operator, Vodafone. Tags: , , , , , , , , .

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