In a bid to gain leadership in the telecommunications market, Sunil Mittal-promoted Bharti group has merged group companies Bharti Telenet (a company offering fixed-line services), Bharti Telesonic (long distance) and Bharti Broadband (Internet and very small aperture terminal) into a single company called Bharti Infotel Ltd.
With this merger, Bharti has streamlined its telecommunications business into two companies: Bharti Cellular with 16 cellular licences, and Bharti Infotel for all non-mobile ventures. Both these companies are wholly owned subsidiaries of Bharti Televentures, listed on the stock exchanges.
The chief executive of each of these merged companies would continue to function as the head of the strategic business unit and would report to Badri Aggarwal, president, Bharti Infotel.
The chief executives of different fixed-line circles will also continue in their positions.
Bharti Telenet has over 270,000 customers under the Touchtel brand, while Bharti Telesonic has most of the 9 million cellular subscribers of the country as its customers for long-distance services under its brand, IndiaOne.
Bharti Broadband offers Internet services to 118,000 customers under the Mantra brand name and also very small aperture terminal services.
The combined turnover of the new entity was around Rs 400 crore (Rs 4 billion) for the half year ended September 2002.
Aggarwal said details like retaining brands for various services, streamlining manpower and offering a bundled solution to customers would have to be worked out.
"This initiative is designed to ensure synergetic businesses through a 'single point contact.' The customer is looking for a single-stop solution provider who will take responsibility for the entire chain and deliver higher capacities," said Sunil Mittal, chairman and group managing director, Bharti Enterprises.
"The merger will enable the company to do away with procedural hassles and decrease overhead costs. For instance, we would not be required to have separate boards for each of these companies, thus saving time and energy," said Akhil Gupta, joint managing director, Bharti Group.
According to analysts, the Bharti merger is in line with the industry trend of consolidating businesses.
The Tata group is also in the process of merging its fixed-line business under Tata Teleservices with that of the long-distance company, Videsh Sanchar Nigam Ltd.
"The merger of the three units will also improve the valuation of the company, apart from tapping synergies," a telecommunications analyst said.
