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Bharti takes a call on merger of cell quartet

New Delhi, April 8: The Bharti group has approached the department of telecommunications (DoT) for the permission to merge its four cellular service providers — Bharti Mobitel, Bharti Telenet, Bharti Mobile Ltd and Bharti Mobinet — with Bharti Cellular, the mobile grandee within the group.

The consolidation move comes within a fortnight of the Union Cabinet’s decision to allow the split-up and transfer of licences, paving the way for telecom mergers and de-mergers.

When the Cabinet decision was announced, the government had indicated that this would pave the way for consolidation and specifically mentioned the Bharti group and the Reliance group as possible candidates who might opt for such mergers. Bharti Televentures, the group’s holding firm and the only one listed on bourses, has a 100 per cent stake in Bharti Cellular.

Bharti Cellular, in turn, has a 100 per cent holding in Bharti Mobitel Ltd and Bharti Telenet, the cellular service providers in Calcutta and Himachal Pradesh. It also has a 74 per cent in Bharti Mobile Ltd (26 per cent held by Telia AB of Sweden) and 95.3 per cent in Bharti Mobinet Ltd (4.7 per cent by DSS Mobile).

Bharti Mobile Ltd has the licence to provide cellular services in Andhra Pradesh, Punjab, Karnataka and Tamil Nadu.

Bharti Cellular directly offers cellular services through its divisions in Delhi, Himachal Pradesh, Mumbai, Maharashtra, Gujarat, Madhya Pradesh, Haryana, Uttar Pradesh (West), Kerala and Tamil Nadu.

Bharti Televentures Ltd has filed the request for change in the records of DoT of the cellular licences, which it wants to club under one company — Bharti Cellular.

“The Bharti group filed the request on Friday to merge its three cellular licences — Bharti Mobitel, Bharti Telenet and Bharti Mobile with Bharti Cellular. There is a separate request for de-merger of Bharti Telenet and then merger of its cellular operations with Bharti Cellular Limited,” DoT sources said.

Bharti Telenet is a company that provides cellular services in Himachal and basic services in several circles across the country, which explains why the company will be de-merged and then merged with Bharti Cellular.

Bharti Cellular has already sought and received approvals from various high courts and the Company Law Board for the merger of its cellular licences. The cellular licence for Chennai, which is held by Bharti Mobinet Ltd, will also be clubbed under Bharti Cellular and the request for this will be made soon, sources within the company said. Bharti Cellular began the process of consolidation by offering its cellular services in all its circles under the AirTel brand-name.

The Bharti and Reliance groups had been urging the government to allow de-merger of businesses under telecom service licences by relaxing the non-transferability clause under certain conditions.

The companies were barred from assigning the cellular licences or transferring them to other entities when these were issued in 1994. There was also a restriction on creating any third party right in any manner whatsoever. Also prescribed was a five-year lock-in period, during which the equity structure of the licensee company was not allowed to be changed.

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