Bharti to share infra in Africa to cut operational cost

Telecom major Bharti Airtel, which had acquired Zain's Africa operations recently, today said it will partner with existing players in the continent to share infrastructure to reduce operational costs.

"We have decided to form tower companies in each country in the next few quarters and that will definitely help. We have already initiated some discussions at country-level for collaboration on fibre optic sharing and tower sharing," Bharti Airtel Chief Executive (International) and Joint Managing Director Manoj Kohli said in an investors' call.

Last month, Bharti had completed its $10.7-billion acquisition of the Kuwaiti telecom major Zain's assets in African 15 countries. Bharti had taken a loan of $9 billion from a clutch of global and domestic banks to fund the deal. The company has pegged its annual debt servicing cost for the deal at $200 million.

When asked about the rationale for sharing infrastructure, Kohli said: "Extension into smaller towns will be at a lower capex through sharing. Also, we have discussed with the respective governments for universal service obligation fund, wherever it is available, we will utilise that."

The world's fifth-largest mobile operator by subscribers plans to launch its brand across the 15 markets in October and has earmarked an investment of about $800 million for the first year.

Kohli further said infrastructure sharing is an important initiative globally and the company would look at leveraging various partnerships to reduce its costs. "I think it will also be good to collaborate in terms of network sharing, infrastructure sharing and towers, fibre optics etc," he said.

The shared infrastructure model has helped Airtel grow its presence in the domestic market and it plans to extend the same model to Africa as well. "We cover 4,50,000 villages in India and we have made that market very viable. We would have a similar strategy for Africa as well," Kohli said.

The company is also working on partnerships for outsourcing its IT, BPO and shared services. "We are in the process of finalising partners for IT, business model for network, BPO and shared services as different countries need a different model," he said.

Bharti Airtel has tie-ups with IBM, Ericsson and Nokia Siemens for its Indian operations.