Sunil Mittal-led Bharti becomes majority stakeholder in UK's BT Group: 10 key takeaways

Bharti-BT Group investment: Sunil Bharti Mittal-led Bharti Enterprises on Monday announced that the company is investing $4 billion to acquire a 24.5 per cent stake in BT Group, one of the UK’s leading telecommunications firms. This investment not only marks Bharti’s substantial return to the UK market but also positions it as the largest shareholder in BT Group.

Sunil Mittal elaborated on the strategic motivations behind this investment and Bharti’s future plans. Here are the key highlights from his discussion:

Key highlights from Sunil Mittal’s briefing

1. Focus on Indian market for 2-3 Years: Mittal confirmed that Bharti Airtel will prioritise its Indian operations over the next few years, concentrating on enhancing 5G rollout, addressing 4G coverage gaps, and expanding its fiber and fixed wireless access networks. While domestic growth is the immediate focus, future global expansion remains a possibility.
2. $4 billion investment in BT Group: Bharti Enterprises’ acquisition of a 24.5 per cent stake in BT Group is a strategic move designed to capitalise on global opportunities. The investment, valued at $4 billion, establishes Bharti as the largest shareholder in BT, reflecting its confidence in BT’s potential despite slower growth in the UK market.
3. No current plans for increased BT stake: Mittal indicated that Bharti does not plan to increase its stake in BT Group beyond 24.5 per cent at present. The emphasis will be on integrating and understanding BT’s operations, with any potential future investments contingent on the partnership's progress.
4. Commitment to global expansion: Mittal reiterated Bharti Enterprises’ commitment to global investments, leveraging its strong Indian market position. He highlighted Airtel’s presence in 17 countries as evidence of Bharti’s international footprint and expressed optimism about future global opportunities for Indian companies.
5. No immediate board seat in BT Group: Bharti Enterprises has opted not to seek a board seat in BT Group for now. Mittal clarified that this decision aligns with the nature of the public block transaction. Nevertheless, Bharti aims to add value to BT’s operations, and the possibility of a board seat in the future remains open.
6. OneWeb’s Satellite services awaiting approval: Mittal announced that OneWeb’s satellite network is fully operational but awaiting approval from the Department of Telecommunications (DoT) to commence commercial services. He stressed the importance of this service for remote areas and urged for expedited approval.
7. Distinct operations from Airtel: Mittal stressed that the investment in BT Group is a strategic decision by Bharti Enterprises, separate from Airtel’s operations. Although there may be potential for synergy, the primary goal is to enhance BT’s performance through Bharti’s investment.
8. Future global opportunities for Airtel: Mittal hinted that once Bharti Airtel achieves its domestic objectives and cash flow improves, global expansion could be considered. Future decisions will depend on the company’s financial health and strategic direction.
9. Supportive role of Indian government: Mittal acknowledged the Indian government’s role in encouraging global expansion and aligned Bharti’s investment in BT Group with this broader policy direction. He asserted that other Indian companies will follow suit as they grow in the domestic market.
10. Positive Outlook on BT’s future: Despite challenges in the UK market, Mittal expressed strong confidence in BT Group’s future. He highlighted the favorable valuation of BT’s stock and anticipated significant returns from the investment as BT advances its strategic goals and improves cash flows.