India’s largest telecom company Bharti Airtel is feeling the heat of the ongoing price war in the telecom sector unleashed by Reliance Jio, owned by the country’s richest man Mukesh Ambani.
The market leader reported a 72% fall in net profit in the January-March quarter to Rs 3.73 billion (US$ 575 million), its smallest in four years, reports Economic Times.
To expand its network, strengthen balance sheet and pare over US$ 14 billion debt, the company is planning to sell a controlling stake in its tower arm Bharti Infratel.
Airtel had contemplated selling a controlling stake in Infratel in October, but shelved the plan in March. The recent surge in Infratel share price, over 26% in three months, has motivated it to have a re-look, the daily added.
The rise in scrip value is based on the expectation that following consolidation in telecom sector, companies will invest in expanding networks and it will benefit tower companies.
The company directly holds 50.33% of Bharti Infratel, which had 90,646 towers at March-end, including its share in Indus Towers by virtue of 42% stake.
Meanwhile, there is going to be no letup in the telecom price war. Reliance Jio is planning to introduce a 4G feature phone priced as low as Rs 500 (US$ 7.7) on July 21, along with attractive price plan. The move is expected to encourage users of 2G feature phones on other networks to make the switch to Jio’s 4G network.