Bharti Airtel to buy out Alcatel-Lucent stake in its joint venture

Bharti Airtel, India's largest private telecom firm, on Tuesday said it will buy out Alcatel-Lucent's entire stake in a joint venture company that manages the fixed-line and broadband network for Bharti.

The companies did not give any financial detail of the deal.

Bharti and the Indian unit of Alcatel-Lucent had formed the 26:74 joint venture, Alcatel Lucent Managed Network Service India Ltd, in 2009 to manage Bharti's fixed-line and broadband networks.

The five-year USD 500 million network contract for the joint venture was to end in April 2014.

Bharti Airtel said after the buyout, the company would operate independently and going forward it would invite other telecom operators for equity participation and bring the management of their broadband and fixed-line networks under the entity.

It also named Shishir Kumar as the new chief executive of the company. Kumar was earlier the chief executive for the northern region at Bharti Airtel.

In a statement, Bharti Airtel said it was introducing a new business model for managing fixed line and DSL broadband networks, on the lines of Indus Towers.

Bharti Airtel subsidiary Bharti Infratel holds 42 percent stake in Indus Towers, with the remaining stakes in the company with Vodafone (42 percent) and Idea (16 percent).

"The operations of the entity will be strengthened by the transition of proven tools, processes and all manpower and skilled resources from the existing joint venture," it said.

"It will operate independent of Bharti and going forward, will invite other operators to join in with equity participation and bring the management of their broadband and fixed line networks under its fold," the statement said.

Bharti Airtel CEO (India & South Asia) Sanjay Kapoor said with the new innovative model, the company was breaking new ground in an industry which is on the cusp of a massive data growth.

This new model, along with the recently launched Network Experience Centre, would provide greater control for Bharti Airtel over the delivery of a world-class data experience to customers, he added.

Alcatel-Lucent India President and Managing Director Munish Seth said the joint venture was a catalyst in transforming Bharti Airtel's Telemedia business.

The formation of this new model is a step in that direction and will leverage the core competencies that Alcatel Lucent Managed Network Service India has built," he said.

Bharti Airtel offers broadband, data and telephone services (fixed line) in 87 Indian cities and has a customer base of 3.3 million. Out of them, 1.4 million are subscribed to broadband/internet services.