Bharti, the Indian tech and telecoms giant that owns Airtel, has announced its acquisition of a 24.5% stake in BT, the U.K.’s former incumbent telecoms carrier. This move comes as telecoms companies seek stronger footing in the rapidly-shifting technology and communications market. The stake is valued at approximately $4 billion, based on BT’s market cap of £13 billion ($16 billion) at the time of the deal. Bharti will initially purchase 9.99% of the stake and will acquire the remaining portion once regulatory clearance is obtained.
Altice, the previous owner of the stake, has faced instability due to debt-led acquisitions and corporate scandals. Altice had acquired its stake in BT in multiple tranches, starting in 2021 and concluding in May 2023. The sale of the stake to Bharti follows Altice’s recent divestment of media platform Teads to Outbrain for around $1 billion.
The telecoms industry is currently focused on two major milestones: 5G and AI. These advancements can be seen as both threats and opportunities depending on how carriers navigate them. Bharti’s investment in BT is driven by the desire for better economies of scale in purchasing, development, and strategy. As competition intensifies from technology giants that pose a potential threat to traditional telcos, Bharti aims to collaborate on industry best practices and emerging technologies. The company specifically mentions AI and 5G R&D as areas of potential synergy between the two countries.
Interestingly, BT had previously held a 21% stake in Bharti between 1997 and 2001. This long-standing relationship between the two companies adds historical significance to the deal. Bharti’s founder and chairman, Sunil Bharti Mittal, acknowledges the significance of the investment in BT, noting that it marks a milestone in Bharti Group’s history.
BT, on the other hand, keeps its statement concise, expressing its welcome to investors who recognize the long-term value of the business. Allison Kirkby, BT’s CTO, highlights the company’s ambition and vision for the future and expresses her excitement for ongoing engagement with Bharti.
Overall, this deal between Bharti and BT signifies the growing need for telcos to adapt to the evolving technology and communications landscape. By joining forces, these companies aim to leverage their expertise and resources to navigate the challenges and opportunities presented by 5G and AI. The investment from Bharti is not only a financial transaction but also a strategic move to foster collaboration and industry growth.
