Bharti set to soar with $460M injection

Armed with an additional $460 million equity investment and the government's nod for eight basic licenses, Bharti is set to become India's leading telco

In this story: Capital round-up 'Limited mobility' coup RELATED STORIES, SITES

By CNN's Kristie Lu Stout

NEW DELHI, India (CNN) -- Indian telecom group Bharti Enterprises said on Monday it had received additional equity investment totaling $460 million.

Bharti, one of India's largest private telecom groups with interests in cellular telephony, also announced that it was planning its first public offering of shares to raise $200 million.

The announcements come after Bharti received the Department of Telecommunication's letters of intent for eight basic licenses, a coup that positions Bharti potentially to become India's leading telecom operator.

Capital round-up

The $460 million capital injection includes $200 million each from SingTel and Warburg Pincus, according to a Bharti statement.

SingTel's latest investment is in addition to the stakes it already owns in two Bharti Group holding companies.

Other investors include AIF Funds Management, which placed $35 million, International Finance Corp. with $20 million, and New York Life with $5 million.

The group plans to raise an additional $200 million with an initial public offer at a date yet to be determined.

"The company plans to make an IPO to raise an additional $200 million at an appropriate time in the future," a Bharti statement said.

The statement did not say if the IPO would take place in domestic or overseas markets.

Firms belonging to the group provide cellular services in New Delhi and in India's southern states of Karnataka, Tamil Nadu and Andhra Pradesh.

The firm, majority owned by the New Delhi-based Mittal family, also has interests in fixed line telephony in the central state of Madhya Pradesh and has announced plans for long distance telephony.

'Limited mobility' coup

India's Department of Telecommunications (DoT) issued letters of intent to Bharti for basic telecom licenses in Delhi, Tamil Nadu, Karnataka, Maharastra, Punjab, AP, Haryana, and Kerala.

Bharti is the first company to receive the letters of intent with modified terms following recent controversy on "limited mobility."

"Limited mobility" is a service offered by basic service operators where a fixed-line phone connection can be used like a cellular service within a set geographical area, using a mobile handset.

Cellular operators are currently challenging the government's decision to allow fixed-line providers to offer mobile services, saying that the move gives them a back door entry into the wireless business.

Currently, fixed-line operators in India enjoy a substantial government subsidy -- 60 percent of long distance revenues can be kept by long distance operators.

"The limited mobility issue kills the cellular market because they don't have access to the subsidy," said Anjali Hans of the Cellular Operators' Association Of India (COAI).

"It will not benefit all fixed line operators, but those that have applied for long distance telephony including Bharti."

With more than 175,000 subscribers, Bharti is the largest private basic telecom service operator in the country. It is also the third largest mobile service provider after Hutchison and BPL with a subscriber base of more than 600,000.

BSNL rivals Reliance in Net telephony
April 6, 2001
VSNL losing ground in Indian ISP war
March 28, 2001
Reliance to tap into call centers
April 24, 2001

Bharti Enterprises

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.