Bharti Airtel Limited (BAL) was incorporated on July 7, 1995 as a public limited company. It is India’s leading private sector provider of telecommunications. Company is promoted by Mr Sunil Bharti Mittal. Bharti Airtel (formerly Bharti Tele-Ventures), a part of Bharti Enterprises, works through three individual SBUs -mobile services, broadband and telephone services and enterprise services. The company provides GSM mobile services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 15 circles. The enterprise services group has two sub-units - carriers (long distance services) and services to corporates. The company is also one of the fastest growing fixed line and long distance (DLD as well as ILD) operators in the country. It offers broadband and other data oriented services to corporate clients. The company has a strategic alliance with Singtel, the largest of its kind made by SingTel outside Singapore. The company also has a strategic alliance with Vodafone, which is one of the largest single foreign investments made in the Indian telecom sector.

Products & services—

Bharti is India’s largest private sector integrated telecom operator providing mobile, broadband and telephone services (B&T), and enterprise services. It is India’s largest wireless operator with a pan-India mobility network spanning all 23 telecom circles; its B&T services are currently available in 95 cities. BHARTI had a wireless subscriber base of over 101 mn, implying a market share of around 24% of the Indian wireless market. The enterprise services division provides carrier (long distance services) and other services to corporate. Bharti has recently forayed into providing DTH and IPTV services, besides launching 2G and 3G services as the fifth mobile operator in Sri Lanka. It provides telecom services in Seychelles also. Bharti Enterprises also manufactures and exports telephone terminals and cordless phones. Apart from being the largest manufacturer of telephone instruments, it is also the first telecom company to export its products to the USA. Bharti Airtel (BAL) remains the undisputed leader in Iindian mobile space, in terms of subscriber and revenue share. Company is looking to take forward growth to rural areas. Company already has a leading presence in rural areas already due to its superior network coverage. Along with this, company is well-placed to leverage on the rise in demand for towers via Bharti Infratel (BITL) and Indus Towers (Indus).

Recent developments—

The potential merger of India’s largest GSM mobile telecom service provider Bharti Airtel and South Africa’s largest telecom company MTN Group is the largest global telecommunications transaction and the fourth biggest global merger and acquisition (M&A) deal this year. The Bharti- MTN deal with a potential value of USD 23 billion is nearly half of the total telecommunication M&A transactions announced till mid of this month. As per global deal tracking firm Dealogic,  global telecom volumes in 2009 stood at USD 49.2 billion through 410 deals. Bharti-MTN deal would be the fourth-largest deal so far this year after the Wyeth-Pfizer transaction amounting to USD 61.8 billion, Schering-Plough and Merck deal worth USD 45.9 billion and the US government hiking its stake in Citi to 36% for USD 25 billion.

Telecom research and consultancy firm Frost and Sullivan has named Bharti Airtel, one of India’s leading telecom service providers, as the best service provider in the Asia-Pacific region. The company has been named the service provider of the year in the “Best of the Best” category for its overall service qualities.

Company announced a managed services deal with Comviva, the leading provider of integrated VAS solutions for mobile operators in emerging markets. With the signing of this pact, Bharti Airtel becomes the first telecom services operator in the world to have a managed services agreement for its value added services portfolio. As part of this three-year deal, Comviva will manage around 2,000+ of Airtel’s VAS nodes across India from various partners, to meet defined service level agreements. Bharti Airtel is a pioneer in deploying innovative operational models, having achieved an industry first by partnering Ericsson and Nokia Siemens to manage its networks and IBM for its IT management. This managed services pact with Comviva will further reiterate Airtel`s commitment to its customers to offer then best in class products and services that will enhance their mobile usage experience.

Valuation—

At current market price, stock is trading at 15.42 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “Bharti Airtel Limited” with medium to long term investment prospective.