India's second-largest service provider, Bharti Airtel, has announced the withdrawal of corporate restructuring plans, because the board believes its existing structure allows it to best leverage the telecom reforms announced by the government in September 2021.
Bharti Airtel eventually plans to wrap Bharti Telemedia, its DTH business, within the Airtel brand to provide converged services to the subscribers. The press note also says the businesses will continue to be categorized under four key verticals – India, digital, international and infrastructure.
"With a strong balance sheet and 5G ready network, Bharti Airtel is well positioned to invest aggressively in the emerging growth opportunities offered by India's digital economy," the statement issued by the company says.
"The board of directors of Airtel is of the view that the existing corporate structure of the company is, therefore, optimal for leveraging these emerging opportunities and unlocking value while continuing to scale up Airtel's digital businesses. Therefore, the scheme of arrangement for the new corporate structure announced on April 14, 2021 stands withdrawn."
The service provider had announced a corporate restructuring program in April 2021 to focus on its digital assets.
All digital assets, including Wynk Music, Airtel Xstream, Airtel Thanks app, Mitra payments platform, Airtel IQ, Airtel Secure, Airtel Cloud and all future digital products and services were to be housed under Bharti Airtel.
The plan was designed to help it focus on its digital assets and clearly segregate mobile, broadband and DTH businesses.
Above all, the corporate restructuring was initiated to ensure that revenue from its digital business remained out of adjusted gross revenue (AGR) calculations.
However, the government modified the definition of AGR in September 2021. According to the new definition of AGR, non-telecom revenue will not be considered in the calculations for telecom license fees owed.
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— Gagandeep Kaur, contributing editor, special to Light Reading