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Bharti buys BT stake in mobile firm

British Telecom exited India's domestic telecom market on Monday by sewing up a deal to sell its 44-per cent stake in a local mobile company to a holding company of New Delhi-based telecom group Bharti Enterprises.

"BT has agreed terms of its sale of a 44 per cent stake in Bharti Cellular. The buyer is Bharti Televentures," Harry James, BT's spokesman for Asia-Pacific, said.

The companies did not reveal financial details of the deal but a BT official in London who did not wish to be identified said the holding had been sold for about 120 million pounds.

The two firms said in a joint statement the move followed BT's strategic decision to realize value from operations outside Europe to cut debt.

BT, which is wrapping up a 5.9 billion-pound rights issue of shares, had announced earlier its plan to exit businesses outside Europe to slash a 28-billion-pound debt pile accumulated through purchases of advanced mobile phone licences and acquisitions.

Bharti Cellular, in which BT first invested in 1997 and raised its holding to 44 percent in June 1998, offers mobile phone services in New Delhi and is one of India's largest and most profitable cellular companies.

The company, one of three cellular firms operating in the Indian capital, has the largest number of customers in any single Indian city with 350,000 subscribers.

The sale marks BT's exit from all its domestic telecoms businesses in India. In April, it sold its stakes in two ventures -- Bharti BT Internet and Bharti BT V-SAT -- for an undisclosed sum to the unlisted Bharti group.

BT's only other significant presence in India is in Mahindra-British Telecom, a software venture with Indian automaker Mahindra & Mahindra. BT owns 43 per cent of the firm and also gives it about 75 per cent of its business.

Deal to help Bharti

The latest deal will also come in handy for the Bharti group which is in the midst of an exercise to transfer shareholders in various operating companies to one holding company Bharti Televentures, which it plans to list later this year.

The deal will not dent Bharti's finances as the group has a big war-chest after it secured $460 million in funding from a raft of overseas investors last month.

In the past nine months, Bharti has secured funding of more than $1 billion from overseas investors including Singapore Telecom and private equity investors E M Warburg Pincus, the International Finance Corp and New York Life.

Singapore Telecom has so far invested $650 million in the Bharti group while Warburg Pincus is the second largest overseas investor with an investment of $300 million.

The Bharti group's operations span mobile and fixed-line telephony, manufacture of telephone handsets, Internet access and a V-SAT network.

The group is also laying a 35,000-km nationwide optic fibre link across India and together with SingTel, it is laying an undersea cable link connecting the Indian cities of Bombay and Madras with Singapore.

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