Airtel Introduces New Corporate Structure: Know Why

To increase its revenues from digital assets, Airtel has announced a new strategy. The telecom operator has come up with a new corporate structure, which is likely to reduce its telecom liabilities. Besides, this structure will enable Airtel to focus on content, payment platform, music, and cloud services.

Notably, the company shared this development after launching a 5G-ready IoT platform for its enterprise customers. However, industry sources said that the new entity would be the face of the company and it should attract investment from other international companies.

The telecom operator said that the new entity will include Mitra Payments, Wynk Music, Airtel Xstream, Airtel Thanks app, Airtel Secure, Airtel Cloud, Airtel IQ, and all future digital services or products. The telecom operator states that the board approved this scheme and allowed Airtel to file for all approvals.

"The company has moved the government to seek clarity on licensing policy, given that carriage, telecom, and DTH, is currently being regulated and managed under two separate ministries, of communications and I&B, respectively," the telecom operator said.

Airtel To Focus On Separate Entities

The main reason behind restructuring strategies is to attract investors. Similarly, Reliance Jio attracted 13 international investors in 2020. The company raised money from all investors and reduce its debt. It is worth noting that Reliance Jio raised 1.5 lakh crores from global investors in 2020. For the unaware, Sunil Mittal owned 24 percent in Bharti Airtel, whereas Singtel owns 31.7 percent.

"The new structure will focus on the four distinct businesses - Digital, India, International, and Infrastructure. This structure will serve us well over the coming years and is a win-win for all stakeholders," Sunil Bharti Mittal, Chairman, Bharti Airtel said.

Telecom Operators Plans To Reduce Their Debt

Apart from restructuring its business, Airtel wants to reduce its telecom dues, including license fees, spectrum usage charges, and adjusted gross revenue. Besides, analysts believe that Airtel is following Reliance Jio and Vi might follow the same soon to reduce its debt. They also pointed out that all telecom operators are now focussing on digital assets as they want to increase their revenues from the segment.