Sunil Mittal’s plans to acquire a majority stake in BT (formerly British Telecom) mark the beginning of an ambitious roadmap to expand into the global communications market. While Mittal’s Airtel already has a presence in Africa, Sri Lanka and Bangladesh, the acquisition of a stake in BT opens the doors to the lucrative European market.

“All the investments we have made into Airtel are now yielding great rewards in terms of stock price, market cap, and strong cash flows. This gives us the confidence and opportunities to look beyond India. Airtel is already present in 17 countries and if more opportunities arise, we will not shy away,” Mittal said during a media interaction.

While Mittal has used his global investment company, Bharti Global, to acquire the BT stake, he does not rule out the possibility of Airtel itself expanding into international markets in the future. “Airtel has been busy building India and will likely remain focused here for the next 2-3 years. However, as the capital requirements in India decrease, there could be opportunities in the global market, so I would not rule that out,” Mittal added.

Challenge ahead

For now, the major challenge for Mittal will be to help BT turn its business around. Despite being one of the oldest and largest telecom players in the UK, BT has faced significant challenges over the past few years. According to a report by the Financial Times, the emergence of numerous alternative network providers, or “altnets,” has posed a threat to BT, leading the company to warn last year that it could lose more broadband customers than expected.

BT’s shares have declined by 30 per cent in the last year, as the costs of building out new fiber and 5G networks, coupled with pressures on free cash flow, weighed heavily on the business. BT Group PLC recently reported progress in its fiber rollout, but legacy issues and pressures in its business and consumer units led to a decline in revenue despite ongoing cost-cutting measures.

Mittal, however, remains optimistic. “I believe the risk profile of BT is behind us. We are going to see brighter days ahead for this company,” Mittal told businessline. The Bharti chief could also leverage BT’s extensive global presence to further his expansion plans.

Turning around companies is not new to Mittal. In 2015, he invested in the distressed British satellite services company OneWeb. Over the past five years, this venture has been revived, launching services in various parts of the world, including India. “We are ready to launch OneWeb services in India. We are waiting for the necessary approvals from the government,” Mittal stated.

With the BT investment, life has come full circle for Mittal. Back in 1997, when Airtel was a relatively unknown entity, Mittal struggled to find a strategic partner. BT, then British Telecom, bailed out Airtel by acquiring a 21 per cent stake. Although the British company exited in 2001, Mittal may now be returning the favour by offering not only capital but also his experience in running a nimble telecom company in a highly competitive market.

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