Bharti Airtel unveils restructuring plan

27 Jun 2011

India’s Bharti Airtel has revealed that it will undertake a restructuring exercise under which it will merge three separate businesses which currently account for around 90% of the company’s revenues, according to the Indian Economic Times. Airtel has said that it will merge its mobile, satellite TV and fixed line and broadband Telemedia units, with the corporate restructure being performed with a view to cutting costs and boosting efficiency at the telco in the wake of falling profits. The only unit not to be included in the merger plans is Airtel’s enterprise arm, which serves corporate and SME customers and has responsibility for the company’s undersea cable offerings. In response to queries regarding the possible impact on jobs at the company, with some estimates that as many as 2,000 positions could be at risk, Airtel said that the restructure would have a ‘minimum impact on people’. It has been suggested that those employees potentially affected by the corporate reshuffle may be given the opportunity to move to one of the group’s other departments or possibly one of its African units, with one unnamed Airtel employee cited as saying that staff may be given the option to move to ‘similar functions within group companies that handle telecom infrastructure, agriculture, retail, value-added services as well as its mobile businesses in 16 African countries.’

As previously reported by CommsUpdate, last month Airtel reported a hefty drop in net profit in its 2010-11 fiscal year, a decline it claimed was the result of foreign exchange restatement losses, rebranding expenses and increased spectrum charges at its domestic unit. For the twelve months ended 31 March 2011 the group posted net profits of INR60.5 billion (USD1.354 billion), down 32.6% year-on-year, while net profit in the final three months of the fiscal year stood at INR14 billion, representing a decline of 31% against the same period a year earlier.

India, Bharti Airtel